Find income of landowners and real wages in each country, International Economics

Assignment Help:

Q.  In Foreign and Home there are two factors of production, land and labor, used to produce only one good.  The land supply in each country and the technology of production are exactly similar.  The marginal product of labor in each country rely on employment as follows:

                 Number of Workers                                            Marginal product

                       Employed                                              of Last Worker

1                                                                                 30

2                                                                                  29

3                                                                                  28

4                                                                                   27

5                                                                                  26

6                                                                                  25

7                                                                                  24

8                                                                                  23

9                                                                                  22

10                                                                                 21

11                                                                                20

Originally there are 11 workers employed in Home but only 3 workers in Foreign. Find the effect of free movement of labor from the high wage to the low wage country. When such economic migration ceases, what will be the levels of production, the income of landowners and real wages in each country?

Answer:  The total production in the world will enhance since the addition to production the marginal product of labour in the target country is larger for each worker than the loss of production as well the marginal product of workers in the emigration country. The actual wages will go up in the emigration country and fall in the immigration country. Landlord incomes will go up in the immigration country and fall in the emigration country.


Related Discussions:- Find income of landowners and real wages in each country

SRC, What does SRC stand for?

What does SRC stand for?

Discuss the effects of a change in u.s. expected inflation, Q. To answer th...

Q. To answer the following question, please refer to the figure below. Concentrating only at the lower right quadrant, discuss the effects of a change in U.S. expected inflation.

FOREX, part of the return on the investment comes from the asset itself and...

part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?

Homeowork 1, Canadian consumers have 50 dollar in come this is eual to the ...

Canadian consumers have 50 dollar in come this is eual to the gross domestic product. they spand 35 dollars on comuser goods (25 on canadian goods annd 10 on imports) they save 8

Hospital manager function, Hospital Manager Function The manager of th...

Hospital Manager Function The manager of the hospital in IMC is responsible for many things: • Follow-up to the orderly conduct of work at the hospital to achieve high qual

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd