Suppose That Land Is Specific to Corn, Capital Is Specific

question 134

Essay

Suppose that land is specific to corn, capital is specific to automobiles, labor is mobile between sectors, and payments are as follows:
Automobiles: Sales revenue = 200; payments to labor = 100; payments to capital = 100
Corn: Sales revenue = 100; payments to labor = 40; payments to land = 60
Holding the price of automobiles constant, suppose the increase in the price of corn is 20% and the increase in the wage is 10%. What is the impact of this on the income of land and the income of capital? What has happened to the real income of land? What has happened to the real income of capital? What has happened to the real income of labor?

---

Definitions:

Event Causes

Factors or conditions that directly lead to the occurrence of a specific event or outcome.

Stress

A physical or emotional response to demanding circumstances or perceived threats, often resulting in feelings of strain or pressure.

Society's Messages

Refers to the norms, values, and expectations communicated by a society to its members.

Specialized Knowledge

Expertise or skills in a specific area or field that are not commonly held or understood by the general public.