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
Jeremy is an economics learner who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his u

External Debt Problem External debt refers to debt owing by one country to another.  External debt is a more serious problem than internal debt because the payment of interest

Disadvantages of Perfect Competition There is a great deal of duplication of production and distribution facilities amongst firms and consequent waste. Economies of sc

Why do the managers in marris model maximise their satisfaction by choosing a higher growth rate and a lower valuation ratio when compared to the profit maximisation

Explain the importance of Managerial economics Managerial economics bridges the gap among 'theoria' and 'pracis'. The tenets of managerial economics have been derived from quan

what are the instruments variable of marrise''s model?

Using the CD data estimate a quadratic cost function. Test the hypothesis that there is diminishing marginal cost. Be sure to state what critical value you are using. Then, using t

Price Elasticity at Terminal Points The price elasticity at terminal point N equals 0 means that at point N, e = 0. At terminal point M, although, price-elasticity is undefined


Question 1. Discuss the practical application of Price elasticity and Income elasticity of demand Question 2. Discuss profit maximizing model in detail Question 3. Descr