Question
Consider a country with only two industries--Industry A and Industry B. Labour can be employed in either industry, and the value of the marginal product
Consider a country with only two industries--Industry A and Industry B. Labour can be employed in either industry, and the value of the marginal product of labour differs in the two industries. There is a fixed quantity of labour available in the country. In 2020, there is no tax on labour. In 2021, the government introduces atax on labour in Industry Bonly. How do wages in 2021 compare to wages in 2020
n Industry A, the 2021 wage is (Click to select) the 2020 wage.
In Industry B, the before-tax wage in 2021 is (Click to select) the 2020 wage.
In Industry B, the after-tax wage in 2021 is (Click to select) the 2020 wage.
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