Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Manufacturing:Sales revenue: = 360 Payments to labor: = 140 Payments to capital: = 200 Agriculture: Sales revenue: = 150 Payments to labor: = 60 Payments

Manufacturing:Sales revenue: = 360

Payments to labor: = 140

Payments to capital: = 200

Agriculture: Sales revenue: = 150

Payments to labor: = 60

Payments to land: = 90

Holding the price of Manufacturing's good, output quantities in each sector, and the amounts of factors employed in each sector constant, suppose the increase in the price of agriculture is 6% and the increase in the wage is 4%. Wherever possible, please provide numerical answers.

a. What is the corresponding percentage change in the nominal rental rate of land?

b. What is the effect on the real rental rate of land in terms of each good? Explain.

c. What is the corresponding percentage change in the nominal rental rate of capital?

d. What is the effect on the real rental rate of capital in terms of each good? Explain.

e. What is the effect on the real wages? Explain.

f. Which sector is capital intensive in Home?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Commanding Heights The Battle For The World Economy

Authors: Daniel Yergin, Joseph Stanislaw

1st Edition

068483569X, 9780684835693

More Books

Students also viewed these Economics questions

Question

What are their resources?

Answered: 1 week ago

Question

What impediments deal with customers?

Answered: 1 week ago