Question: think about an extension of the specificfactors model in which...
Think about an extension of the specific-factors model, in which, in addition to their wage, labour also earns some part of the rental on specific factor in their industry, i.e., farmers who own their own land and manufacturing workers who salary includes a profit-based bonus. Discuss how this extension affects the conclusion of the model.
*This is not about the regular ambiguous nature of the mobile factor. The question is asking if labour was earning income from capital as well in the specific-factors model, how would this change the already known conclusion of the model. So this is a different scenario