Question: 3. A developing country in the last decade has significantly improved its political stability and education. As a consequence, capital investment has notoriously increased in

3. A developing country in the last decade has significantly improved its political stability and education. As a consequence, capital investment has notoriously increased in the last year. Consider two products, one is capital intensive and the other one is labor intensive. In the short run, a) What will happen to the equilibrium wage and labor in the two sectors (b. ) What will be the effects on the rentals of capital in the two sectors. Explain and do the necessary graphs. 25 points

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