Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ang ! First we have to calculate value of marginal produ- clivity of labowl ( VMPL ) using : VMP, = MP X Price Now

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Ang ! First we have to calculate value of marginal produ- clivity of labowl ( VMPL ) using : VMP, = MP X Price Now since police of both goods equal to 1 VMP = MPL So , wee have to draw just given data on graph .\fSuppose that international trade causes the price of cloth to double (from 1 to 2), while the price of food remains the same. Show the effect that this will have on your graph in part a. Use your graph to answer the remaining questions. Write your answers in the table at the end of the problem. d. What is the new equilibrium wage rate in dollar terms (w)? How much labor is hired by the food industry and how much by the cloth industry? e. What has happened to the purchasing power of the wage in terms of cloth (i.e what has happened to w/Pc)? What has happened to the purchasing power of the wage in terms of food (i.e what has happened to w/PF)? f . What is the amount of income to landowners now, both in dollar terms, and in the amount of cloth and food it can buy (income/Pc and income / PF) ? g . What has happened to the income to capital owners, both in dollar terms, and in the amount of cloth and food it can buy

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Personnel Administration And Labor Relations

Authors: Norma M Riccucci

1st Edition

1317461754, 9781317461753

More Books

Students also viewed these Economics questions

Question

1. What does this mean for me?

Answered: 1 week ago