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What part of the economy was impacted by the change in child labor law?

a) Agricultural Sector
b) Manufacturing Sector
c) Service Sector
d) Financial Sector

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Final answer:

The b. Manufacturing Sector was most impacted by changes in child labor laws, as it had a high demand for low-skilled labor in contrast to the agricultural sector which had diminishing returns with additional workers.

Step-by-step explanation:

The part of the economy most impacted by the change in child labor law is the b) Manufacturing Sector. The theoretical framework provided by economist Sir W. Arthur Lewis explains that in a dual sector economy, the marginal product of low-skilled workers, which could include child laborers, is higher in manufacturing compared to agriculture. This is due to agricultural societies having matured with fixed inputs like land and water, leading to 'surplus workers' when additional labor is added.

Contrastingly, the manufacturing sector greatly benefits from low-skilled labor in its early stages, enhancing productivity and economic growth as it offers more consistent wages despite being low initially. Over time, with the change in child labor laws, the manufacturing sector had to adapt to work with a reduced pool of low-skilled workers, thus potentially accelerating the mechanization and technological advancements within the industry.

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