Increase in the Capital Stock in the Short Run In panel (a), an inflow of capital into the manufacturing sector shifts out the marginal product of labor curve in that sector. The equilibrium in the labor market moves from point A to B, and the wage increases from W to W′. Labor used in the manufacturing industry increases from 0_ML to 0_ML′. These workers are pulled out of agriculture, so the labor used there shrinks from 0_AL to 0_AL′. In panel (b), with the inflow of capital into manufacturing, and the extra labor used in that sector, the output of manufacturing increases. Because labor has been drawn out of agriculture, the output of that sector falls. These changes in outputs are shown by the outward shift of the PPF (due to the increase in capital) and the movement from point A to point B.