Assume a specific factors economy produces two goods, cloth and food, and that wher food is on the y-axis. When the price of cloth increases by 6% and the price of food does not change, A. labor shifts from the cloth sector to the food sector. B. the real wage rates are unaffected. C. the marginal product of labor in the cloth sector falls. D. the marginal product of labor in the cloth sector rises.

Assume a specific factors economy produces two goods, cloth and food, and that wher food is on the y-axis. When the price of cloth increases by 6% and the price of food does not change, A. labor shifts from the cloth sector to the food sector. B. the real wage rates are unaffected. C. the marginal product of labor in the cloth sector falls. D. the marginal product of labor in the cloth sector rises.

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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