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Due to a war overseas, crucial inputs to both the tuna and coconut industries become scarce. Consequently, the price of tuna, PT, rises by 10
Due to a war overseas, crucial inputs to both the tuna and coconut industries become scarce. Consequently, the price of tuna, PT, rises by 10 percent. The price of coconuts, PC, rises by 3 percent. After the relative price change, explain what will happen to the number of workers in the tuna sector, the number of workers in the coconut sector, and the nominal wage in Tonga. Will they rise, fall or stay the same? Explain your answers using a graph
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