Determine share of national output accruing to native worker

Reference no: EM13204197

Suppose that the demand for labor in an economy is Ld = 100 ? 10W, where W = wage in dollars per hour and L = number of workers (in millions). The labor supply of native workers is 50 million, and it is perfectly inelastic. Suppose that this economy experiences a migration inflow of 10 million workers, who also supply labor inelastically.

a) Calculate the equilibrium wage, the share of national output accruing to native workers, and employers' profits before the immigration wave.

b) Calculate the equilibrium wage, the share of national output accruing to native workers, and employers' profits after the immigration wave.

Reference no: EM13204197

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