Use the following information to answer the questions below Computers: Soybeans: Total revenue = Total 120 revenue = 120 Payments to labor = 60 Payments to labor = 80 Payments to capital = 60 Payments to land = 40 Holding the price of computers constant, suppose the price of soybeans rises 10% and that the wage rate increases 5%. a. What is the effect of these changes on the rental rate of capital? b. What is the effect of these changes on the rental rate of land?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
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Chapter4: Labor And Financial Markets
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Use the following information to
answer the questions below
Computers:
Soybeans:
Total revenue =
Total
120
revenue = 120
Payments to labor =
60
Payments
to labor = 80
Payments to capital =
60
Payments
to land = 40
Holding the price of computers
constant, suppose the price of
soybeans rises 10% and that the wage
rate increases 5%.
a. What is the effect of these changes
on the rental rate of capital?
b. What is the effect of these changes
on the rental rate of land?

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