Question: 6. Suppose that, at equilibrium prices pc = $45 and pF = $44, we observe that: aLC = 5 aKC = 3 aLF = 4

6. Suppose that, at equilibrium prices pc = $45 and pF = $44, we observe that: aLC = 5 aKC = 3 aLF = 4 aKF = w = $6/hr r = $5/hr. (a) Find ?LC, ?LF, ?KC, and ?KF. Which industry is labor-intensive? (b) Suppose the price of clothing increases by 20 percent while the price of food is unchanged. What happens to the wage-rental ratio

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