Macroeconomics Help: Assume Country X can produce 2 goods Food and Cloth using Unskilled labour

3 months ago
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Assume Country X can produce 2 goods Food and Cloth using unskilled labour (L) that is mobile between sectors. Capital (K) is specific to producing cloth while Land (T) is specific to producing food. a-(2 marks) Use a single diagram to show how Country X's labour (L) is allocated between food and cloth. Briefly explain why labour is allocated that way. Hint: This is the combined graph with the wage curves for each sector. The graph should represent both wages which are a function of MPL and prices. Clearly label all curves.

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