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 = 200; Payments to labor = 40; Payments to land = 160 Suppose price of corn increases by 20%, the price of automobiles increases by 10%, and the wage increases by 15%. Calculate the Nominal Percentage change on Rental of Land and put your answer in the box below.
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 = 200; Payments to labor = 40; Payments to land = 160 Suppose price of corn increases by 20%, the price of automobiles increases by 10%, and the wage increases by 15%. Calculate the Nominal Percentage change on Rental of Land and put your answer in the box below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 = 200;
Payments to labor = 40;
Payments to land = 160
Suppose price of corn increases by 20%, the price of automobiles increases by 10%, and the wage increases by 15%.
Calculate the Nominal Percentage change on Rental of Land and put your answer in the box below.
(Keep your answer in percentage with 2 decimals. For example, If you got 15.26% , fill in 15.26 in the box below. Do NOT use 0.1526. )
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