ECON 503 Lecture Notes - Lecture 10: Marginal Product, Mpla, Mariel Boatlift

• School: USC, SC, Carolina, South Carolina
• Department: Economics
• Course: ECON 503
• Professor: Hauk

Document Summary

Will increase or decrease labor supply in a country. Increase in labor supply results in fall in nominal/real wages. Km does not change (capital in manufacturing stays same) Na does not change (land in agriculture does not change) Mplm decreases rk /pm increases (real return on capital increases) rk/pa increases. Mpna increase, mpla decrease rn/pa increases, rn/pm increases. Assume all assumptions of h-o model hold true, then when an economy"s endowment of that factor of production increases, industries that use that factor intensively will grow and other industries will shrink.