Assume a specific factors economy produces two goods, cloth and food, and that when representing the output of this economy graphically, cloth is on the x-axis and food is on the y-axis, When the price of cloth increases by 7% and the price of food does not change, A. the output of food rises. B. the real incomes of landowners remain the same. OC. labor shifts from the food sector to the cloth sector OD. the wage rate rises by more than the increase in the price of cloth.

Assume a specific factors economy produces two goods, cloth and food, and that when representing the output of this economy graphically, cloth is on the x-axis and food is on the y-axis, When the price of cloth increases by 7% and the price of food does not change, A. the output of food rises. B. the real incomes of landowners remain the same. OC. labor shifts from the food sector to the cloth sector OD. the wage rate rises by more than the increase in the price of cloth.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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