For example suppose a natural disaster decreases the

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: the stock of land an economy has. For example, suppose a natural disaster decreases the quantity of arable land used for planting crops. a. (10 points) Use a diagram to show this change impacts the labor allocation between manufacturing and agriculture. b. (5 points) What is the effect of this change in land on the quantity of labor in each industry and on the equilibrium wage? Explain. c. (10 points) What is the effect on the rental rate for land and capital? Explain. Prof. Anca Cristea EC 481/581 Winter 2013 PART B: True/ False For each question, answer T/F and briefly explain the answer (...
View Full Document

This document was uploaded on 01/18/2014.

Ask a homework question - tutors are online