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

question 40

Short Answer

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 six 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?

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Definitions:

Stimulus Motive

Innate tendencies that prompt individuals to engage in behaviors without being aware of the reason for doing so, driven by external stimuli.

Incentives

External rewards or stimuli that motivate behavior or encourage action towards a desired goal.

Need For Affiliation

A person's desire to create and maintain social relationships and bonds with others.

Peak Experience

A term coined by psychologist Abraham Maslow referring to a state of profound and deeply moving experience where one feels a sense of unity and meaningfulness in life.