Business, 16.10.2019 01:00 fireflies145

2. (4 points) consider two cities, flexville and rigid city, that have the same equilibrium wage and the same equilibrium total employment. the export industries in the two cities produce the same good. in flexville, export firms produce with variable factor proportions—that is, they can easily adjust the amount of labor in response to changes in the wage, i. e., the price of labor. in rigid city, export firms produce with fixed (or less variable) factor proportions, meaning it is quite difficult to change the amount of labor. suppose that both cities find a way to increase the quality of residential public services (e. g. public schools, parks, libraries) without increasing taxes. use two supply-demand graphs, one for each city, to show the effects of the improvements in public services on • equilibrium employment • the equilibrium wage

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2. (4 points) consider two cities, flexville and rigid city, that have the same equilibrium wage and...

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