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I think it is all on the picture. 6 . This is a question about the determination of wages . Suppose we have 2 economic

I think it is all on the picture.

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6 . This is a question about the determination of wages . Suppose we have 2 economic sectors , agriculture and manufacturing , and suppose that land and capital are specific to each sector , respectively . Labor is perfectly mobile and used in both sectors . Draw a graph showing an equilibrium in the labor market . Label each axis and show the direction in which labor and wages increase . More specifically , let the left -hand origin be fo manufacturing and the right hand origin be for agriculture . Label these as well . Then , do the following A ) Show on the graph what happens when there is an increase in the price of the agricultural good and then show it mathematically B ) Go back to the original equilibrium . Show on the graph what happens when there is a decrease in the price of the agricultural good and then show it mathematically Notice that we for A ) and B ) we are assuming no changes in the price of manufacturing goods

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