Question
Graphically illustrate and explain your answer. I attached a picture to be used as reference. In the answer should include the theory of Marginal Productivity
Graphically illustrate and explain your answer. I attached a picture to be used as reference. In the answer should include the theory of Marginal Productivity of Capital (graph and equation), and Marginal Productivity of Labor (graph and equation) and if necessary include the concepts of Neary Bucket, real wage, Cobb Douglas etc.
Imagine there is significant immigration from Country A to Country B. In Country B there are two sectors; the urban sector and the rural sector. The urban sector produces urban goods and the rural sector agricultural goods. Labor in Country B cannot move between sectors, only Capital can move freely between the two sectors Describe the effects of immigration on the real wage of workers in both sectors, the real rental price paid to capital in both sectors, and the output of both sectors. Who is better off and who is worse off?
Suppose China has two sectors: a domestic goods sector and an export sector. Labor is mobile across sectors. Domestic: Chinese capital is employed only in the domestic goods sector; foreign capital is used only in the export sector; capital cannot move across sectors. Inthe 1990s China gamed\"; to foreign capital, which increased foreign capital inows into China's export sector only.Descr1he the effects on the real wage, the real rental price paid to capital and total output in each sector in the long run. Answer: Labor, as the mobile factor: is in a Near)! Bucket: L : Ln + LE. Capital is immobile; thae is a separate market for capital in the domestic goods sector, Ka. and another market for capital inthe export sector, Ks. Aer opening to foreign M the supply {1ch increases While hy construction KH is constant. The real rental paid to capital in the export sector falls in point 2, and RIP in the domestic goods sector stays at point 1. See the graphs below. MIPLi-i :(17 @614.\" andthe MPKa : Win\Step by Step Solution
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