Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 3 There are a total of 1,050 units of labor in the economy, and workers can either seek employment in one of two sectors:
Question 3 There are a total of 1,050 units of labor in the economy, and workers can either seek employment in one of two sectors: Sector 1 or Sector 2. The graph below depicts the marginal revenue product curves for both sectors in the economy before the introduction of international trade. Wage, Wage, $36 $36 $32 $32 $28 $28 $24 $24 $20 $20 $16 .. MRP $16 MRP - 150 300 450 600 750 900 1,050 Part (iv): Suppose that the country begins to export the product sold by Sector 2, and as a result, 150 workers migrate from Sector 1 to Sector 2. By how much did exporting increase the marginal revenue product of every worker in Sector 2? A. $3 B. $4 C. $5 D. $6 E. $8 Part (v): Suppose that the country begins to export the product sold by Sector 2, and as a result, 150 workers migrate from Sector 1 to Sector 2. By how much does the equilibrium wage rise in each sector? A. $3 B. $4 C. $5 D. $6 E . $8 Part (vi): Exporting leads the marginal revenue product of labor curve in the agricultural sector to shift upward. What is the source of this upward shift
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started