Use the information given here to answer the following question. Sales revenue = Pm * Qm = 150 Payments to labor = w * Lm = 100 Payments to capital = Rk * K = 50 Agriculture: Sales revenue = Pa * Qa = 150 Payments to labor = w * La = 50 Payments to land = Rt * T = 100 Holding the price of manufacturing constant, suppose the increase in the price of agriculture is %10 and the increase in the wage is %5. Explain what has happened to the real rental on land and the real rental on capital ?
Use the information given here to answer the following question. Sales revenue = Pm * Qm = 150 Payments to labor = w * Lm = 100 Payments to capital = Rk * K = 50 Agriculture: Sales revenue = Pa * Qa = 150 Payments to labor = w * La = 50 Payments to land = Rt * T = 100 Holding the price of manufacturing constant, suppose the increase in the price of agriculture is %10 and the increase in the wage is %5. Explain what has happened to the real rental on land and the real rental on capital ?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use the information given here to answer the following question.
Sales revenue = Pm * Qm = 150
Payments to labor = w * Lm = 100
Payments to capital = Rk * K = 50
Agriculture:
Sales revenue = Pa * Qa = 150
Payments to labor = w * La = 50
Payments to land = Rt * T = 100
Holding the
Explain what has happened to the real rental on land and the real rental on capital ?
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