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Consider an economy that can produce two goods, manufactures and food. Manufactures are produced using capital and labor. Food is produced using land and labor.

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Consider an economy that can produce two goods, manufactures and food. Manufactures are produced using capital and labor. Food is produced using land and labor. The total supply of labor is 20 units. Given the supply of capital and land, the marginal products of labors are as follows:

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Number of Workers Marginal Product of Labor Marginal Product of Labor Employed in Manufacturing Sector in Food Sector 16 20 2 15 19 3 14 18 4 13 17 5 12 16 11 15 7 10 14 9 13 12 10 7 11 11 O 10

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