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Problem
Assume there are two types of nurses: native nurses (Type 1) and immigrant nurses (Type 2). Initially, assume that there are 1 native nurses in the labor force and no immigrant nurses. The aggregate labor supply function of native nurses is 11(), where 1() is the labor supply function of an individual nurse. Get the instant assignment help.
I. Suppose that immigrant nurses have labor supply functions identical to native labor supply functions. Further, assume that firms treat immigrant and native nurses as perfect substitutes. Using a graph, show the effect on native nurses of an influx of 2 = 1 immigrants. Compare this with the effect of immigration if immigrant labor supply is perfectly inelastic.
II. Compare this short-run effects in a. to the effects in the long-run. How do your conclusions depend on the production function?
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