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Consider a country that produces computers (C) and food (F) using capital (K) and labor (L). Both industries are perfectly competitive. The factors of production are complements. As a result, unit factor requirements are fixed and given by: akc=3,akr = 1, aLC = 2 and aLF = 4. Suppose that this economy has 100 units of capital and 150 workers. (b) How does the capital-labor ratio in each industry depend on the relative wage W/R?

Consider a country that produces computers (C) and food (F) using capital (K) and labor (L). Both industries are perfectly competitive. The factors of production are complements. As a result, unit factor requirements are fixed and given by: akc=3,akr = 1, aLC = 2 and aLF = 4. Suppose that this economy has 100 units of capital and 150 workers. (b) How does the capital-labor ratio in each industry depend on the relative wage W/R?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider a country that produces computers (C) and food (F) using capital (K) and labor (L). Both industries are perfectly competitive. The factors of production are complements. As a result, unit factor requirements are fixed and given by: aKc = 3, akr = 1, aLc = 2 and ALF = 4. Suppose that this economy has 100 units of capital and 150 workers. (b) How does the capital-labor ratio in each industry depend on the relative wage W/R?
Transcribed Image Text:Consider a country that produces computers (C) and food (F) using capital (K) and labor (L). Both industries are perfectly competitive. The factors of production are complements. As a result, unit factor requirements are fixed and given by: aKc = 3, akr = 1, aLc = 2 and ALF = 4. Suppose that this economy has 100 units of capital and 150 workers. (b) How does the capital-labor ratio in each industry depend on the relative wage W/R?
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