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Let the productivities in goods and services sectors be given by kg and Rs, respectively. The amounts of labour employed are given by Lg and

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Let the productivities in goods and services sectors be given by kg and Rs, respectively. The amounts of labour employed are given by Lg and L5, where Lg + L5 = l, the total labour force. The total output of each sector is then Qg = 9tng and Q5 = ksLs. Now assuming that the demands for goods and services are equal at all times: Qs=Qg7lsLs=7ngg=lgU-LS) Solving this for Ls yields the expression for the amount of labour engaged in service production: Ls = Ag/(M ls) [Eqn. 1] Based on this information, which of the following statements is correct? Select one answer: a) When the sector productivities are the same, both sectors would employ the same amount of labour. b) When both productivities double, the amount of labour employed in each sector halves. c) When the services sector is half as productive as the goods sector, then it would employ half as many workers. d) The final equation (for Ls) holds even if we relax the assumption of equal demands for goods and services

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