Question
Graphically illustrate and explain your answer. I attached a picture and the link of a book (Chapter 3) to be used as reference. In the
Graphically illustrate and explain your answer. I attached a picture and the link of a book (Chapter 3) 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?
https://jollygreengeneral.typepad.com/files.-gregory-mankiw-macroeconomics-7th-edition-2009.pdf Chapter 3
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