The correct answer is "labour allocation shifts to electronics". Here's why:

1. The new technology improves the productivity of capital, which is a specific input factor in the production of electronics. This means that the same amount of capital can now produce more electronics than before.

2. Given that labour can flow freely between the two industries, workers would naturally move to the industry where their labour can be more productive. In this case, that would be the electronics industry because of the improved productivity of capital.

3. Therefore, we can expect that labour allocation shifts to electronics.

The other options are not necessarily true based on the information given. The marginal product of land may not increase because the new technology only improves the productivity of capital, not land. Workers may not experience welfare loss because the shift in labour could potentially lead to higher incomes. The amount of capital in Japan may not increase because the new technology improves the productivity of existing capital, but does not necessarily increase the amount of capital.

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The correct answer is "labour allocation shifts to electronics". Here's why:

1. The new technology improves the productivity of capital, which is a specific input factor in the production of electronics. This means that the same amount of capital can now produce more electronics than before.

2. Given that labour can flow freely between the two industries, workers would naturally move to the industry where their labour can be more productive. In this case, that would be the electronics industry because of the improved productivity of capital.

3. Therefore, we can expect that labour allocation shifts to electronics.

The other options are not necessarily true based on the information given. The marginal product of land may not increase because the new technology only improves the productivity of capital, not land. Workers may not experience welfare loss because the shift in labour could potentially lead to higher incomes. The amount of capital in Japan may not increase because the new technology improves the productivity of existing capital, but does not necessarily increase the amount of capital.

Knowee AI · Accepted Answer

The correct answer is "labour allocation shifts to electronics". Here's why:

1. The new technology improves the productivity of capital, which is a specific input factor in the production of electronics. This means that the same amount of capital can now produce more electronics than before.

2. Given that labour can flow freely between the two industries, workers would naturally move to the industry where their labour can be more productive. In this case, that would be the electronics industry because of the improved productivity of capital.

3. Therefore, we can expect that labour allocation shifts to electronics.

The other options are not necessarily true based on the information given. The marginal product of land may not increase because the new technology only improves the productivity of capital, not land. Workers may not experience welfare loss because the shift in labour could potentially lead to higher incomes. The amount of capital in Japan may not increase because the new technology improves the productivity of existing capital, but does not necessarily increase the amount of capital.

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