The effect of this immigration on wages, Managerial Economics

Assignment Help:

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.

 


Related Discussions:- The effect of this immigration on wages

Elasticity of demand, a bus operates two routes,one to harare and another o...

a bus operates two routes,one to harare and another one to johanesburg.the company analyst estimated that the elasticity of demand for joburg is 0.9 while for harare is 2.the compa

When is production profitable according to price-taking firm, When is produ...

When is production profitable according to price-taking firm at profit, break-even or loss? Production profitable at profit, break-even or loss: a. When TR > TC, in that cas

Determine the uses of managerial economics, Determine the uses of Manageria...

Determine the uses of Managerial economics Managerial economics studies the application of the principles, methods and techniques of economics to managerial problems of busine

Profession, list all profession which generate personal income

list all profession which generate personal income

Digressive tax, DIGRESSIVE TAX A tax is called digressive when the hig...

DIGRESSIVE TAX A tax is called digressive when the higher incomes do not make a due contribution or when the burden imposed on them is relatively less. Another way in which

Quantity demanded and supplied , a.  A major freeze destroys a large number...

a.  A major freeze destroys a large number of orange trees in Florida Ans- Since the freeze destroyed a large number of orange trees in Florida the number of oranges the selle

Long-run labor demand and factor substitutability, Problem: Long-Run Labor ...

Problem: Long-Run Labor Demand and Factor Substitutability Suppose there are two inputs in the production function, labor (L) and capital (K), which can be combined to produce

What is the advantage of mixed economy system, Benefits are: 1) People...

Benefits are: 1) People can create their own decisions 2) The government has limited control, which is good for arrangement 3) Gives freedoms like Enterprise, ownership,

Keynesian unemployment, Keynesian unemployment According to Keynesian ...

Keynesian unemployment According to Keynesian theory of income and employment, unemployment occurs due to lack of effective demand. If effective demand is less, production of

Nature of commodity and income elasticity, For all regular goods, income el...

For all regular goods, income elasticity is positive though the degree of elasticity fluctuates as per the nature of commodities. Consumer goods are generally categorised under thr

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