An economy consists of two regions the north and the south

Reference no: EM13379470

An economy consists of two regions, the North and the South. The labor market is initially in an economy-wide equilibrium, with 1,000,000 people employed in the North at $25 per hour and 2,000,000 in the South at a wage of $15 per hour. Assuming that the cost of moving from North to South and South to north is negligible and that the employees are perfect substitutes for one another, what would the wage be in the future and how many people would live in the North and the South. Jobs are also perfectly mobile.

Reference no: EM13379470

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