The effect of this immigration on wages, Managerial Economics

An Economy consists of two regions, the North & the South. The short-run elasticity of labor demand in every region is -0.5. Labor supply is perfectly inelastic within both regions. The labor market is partially in an economy wide equilibrium, with 600,000 people employed in the North and 4000,000 in the South at a wage of $15 per hour. Rapidly, 20,000 people immigrate from abroad and initially settle in the South. They possess the same skills as the native residents and also supply their labor inelastically.

 a. What will be the effect of this immigration on wages in each of the regions in the short run (before any migration among the North & the South occurs)?

 b. Assume 1,000 native-born persons per year migrate from the South to the North in response to each dollar differential in the hourly wage between the two regions. What will be the ratio of wages in the two regions after the first-year native labor responds to the entry of the immigrants?

 c. What will be the effect of this immigration on wages and employment in every of the regions in the long run (after native workers responds by moving across regions to take benefit of whatever wage differentials may exist)? Assume labor demand does not change in either region.

 

Posted Date: 3/14/2013 7:23:51 AM | Location : United States







Related Discussions:- The effect of this immigration on wages, Assignment Help, Ask Question on The effect of this immigration on wages, Get Answer, Expert's Help, The effect of this immigration on wages Discussions

Write discussion on The effect of this immigration on wages
Your posts are moderated
Related Questions
Q. Explain about Cardinal utility? A measure of utility or satisfaction derived from consumption of services and goods which can be measured using an absolute scale. Cardinal u

"A budget deficit that is only temporary cannot be the source of inflation."  Is this statement true, false, or uncertain?  Describe your answer.


Relationship between AC, AVC, AFC and MC is elucidated graphically by drawing respective cost curves in Figure below. Behaviour of cost curves is elucidated below. Figure:

Suppose the consumer can choose either coffee shop 1 or coffee shop 2, but not both. - Assuming that other things (such as location, quality of coffee, and so on) are the same,

Foreign Exchange Markets It is the place where buyers and sellers meet to negotiate the exchange of different currencies e.g. forex bureaus. Exchange Rates These are

Pragmatic Managerial economics  Managerial economics is pragmatic. In pure micro-economic theory, analysis is performed, based on certain exceptions, which are far from reality

REMEDIES FOR UNEMPLOYMENT The measures appropriate as remedies for unemployment will clearly depend on the type and cause of unemployment.  Broadly they can be divided into:

is the sales maximization applicable

State the difficulties in the measurement of profit.