Question

The optimal allocation of labor between the two sectors is achieved when the marginal product of labor is equalized across sectors, which is also where the curves intersect.

a. What is the optimal number of workers in the manufacturing sector (M)? What is the optimal number of workers in the agricultural sector (A)?

Answer 1

a. The optimal number of workers in the manufacturing sector (M) and in the agricultural sector (A) is in the point where the marginal products of labor of both sectors are equal.