Suppose that a toxic waste spill renders half of the land in New Jersey uninhabitable. Assuming that land and labor are complements in the production function, what would happen to the wages earned by workers and rents earned by landowners?

a. Both wages and rents would increase.
b. Both wages and rents would decrease.
c. Wages would increase, and rents would decrease.
d. Wages would decrease, and rents would increase.


d

Economics

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