4. 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 labour in the manufactured sector is 6 units per hour, and the marginal product of labour in the agricultural sector is 10 units per hour. What will happen to the distribution of labour between the two sectors?
a. Nothing will happen. The current allocation of labour between the two sectors is ideal.
b. The manufacturing sector will demand more labour, and the agricultural sector will demand less labour at the current wage.
c. The agricultural sector will demand more labour, and the manufacturing sector will demand less labour at the current wage.
d. Both the agricultural and the manufacturing sector will demand more labour at the current wage.
4. 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 labour in the manufactured sector is 6 units per hour, and the marginal product of labour in the agricultural sector is 10 units per hour. What will happen to the distribution of labour between the two sectors?
a. Nothing will happen. The current allocation of labour between the two sectors is ideal.
b. The manufacturing sector will demand more labour, and the agricultural sector will demand less labour at the current wage.
c. The agricultural sector will demand more labour, and the manufacturing sector will demand less labour at the current wage.
d. Both the agricultural and the manufacturing sector will demand more labour at the current wage.
