Suppose That a Large Lake in the Middle of Minnesota

question 61

Multiple Choice

Suppose that a large lake in the middle of Minnesota evaporates,leaving fertile farm land for growing corn.Assuming that land and labor are complements in a farming production function,what would happen to the wages earned by workers and rents earned by landowners?

• A)Both wages and rents would increase.
• B)Both wages and rents would decrease.
• C)Wages would increase, and rents would decrease.
• D)Wages would decrease, and rents would increase.

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