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

National income accounting, NATIONAL INCOME ACCOUNTING This refers to ...

NATIONAL INCOME ACCOUNTING This refers to the measuring of the total flow of output (goods and services) and of the total flow of inputs (factors of production) that pass thro

Ramsey pricing, explain in detail ramsey pricing with example?

explain in detail ramsey pricing with example?

Calculate the equilibrium level of national income, Question: EITHER ...

Question: EITHER Nowadays, there is an urgency in Mauritius to introduce a rapid transit system in order to reduce traffic congestion and shift towards a more efficient mode

Menu costs, Menu Costs   Why do firms not change their prices very  fre...

Menu Costs   Why do firms not change their prices very  frequently? Obviously, the costs of changing prices at  frequent intervals and in small amounts must be more  than the b

The effects of globalization on indian industry, Indian industry has progre...

Indian industry has progressed a lot because of globalization. A lot of development has been seen in Indian industry.

Private cost and social cost, Why we need to distinguish between private co...

Why we need to distinguish between private cost and social cost?

Determine the managerial economics techniques, Determine the Managerial eco...

Determine the Managerial economics techniques Though the most frequent applications of these techniques are as below:  Risk analysis: Numerous models are used to quantif

Economic terms a managerial decision assignment, Describe and answer in eco...

Describe and answer in economic terms a managerial decision you have knowledge about (for example one that has to be made at your place of employment). Some examples of decisions a

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