Suppose That the Wage Is $20 Per Hour in a Two-Sector

question 109

Multiple Choice

Suppose that the wage is $20 per hour in a two-sector (manufacturing and agriculture) specific-factors model. Currently, the prices of manufactured and agricultural outputs are $5 and $1, respectively; the marginal product of labor in the manufactured sector is 6 units per hour; and the marginal product of labor in the agricultural sector is 10 units per hour. What will happen to the distribution of labor between the two sectors?

• A) Nothing will happen. The current allocation of labor between the two sectors is ideal.
• B) The manufacturing sector will demand more labor, and the agricultural sector will demand less labor at the current wage.
• C) The agricultural sector will demand more labor, and the manufacturing sector will demand less labor at the current wage.
• D) Both the agricultural and the manufacturing sector will demand more labor at the current wage.

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Definitions:

Autistic Spectrum Disorder

A range of neurodevelopmental conditions characterized by challenges with social skills, repetitive behaviors, and communication.

Schizotypal Personality Disorder

A mental disorder characterized by severe social anxiety, thought disorder, paranoid ideation, derealization, transient psychosis, and often unconventional beliefs.

Obsessive-Compulsive

A mental disorder characterized by recurrent, unwanted thoughts (obsessions) and repetitive behaviors (compulsions).

Culture-Bound Disorders

Mental disorders or syndromes that are considered to be specific to or strongly associated with certain cultural populations or societal contexts.