Phloow
 
Reply Sun 1 Jun, 2014 07:15 am
Using the numerical example in problem 5, assume now that Foreign limits immigration
so that only 2 workers can move there from Home. Calculate how the movement
of these two workers affects the income of five different groups:
a. Workers who were originally in Foreign
b. Foreign landowners
c. Workers who stay in Home
d. Home landowners
e. The workers who do move

5.
In Home and Foreign there are two factors each of production, land, and labor used to
produce only one good. The land supply in each country and the technology of production
are exactly the same. The marginal product of labor in each country depends
on employment as follows:
Number of Workers - Marginal Product
Employed of Last Worker

1 - 20
2 - 19
3 - 18
4 - 17
5 - 16
6 - 15
7 - 14
8 - 13
9 - 12
10 - 11
11 - 10
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bobsal u1553115
 
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Reply Sun 1 Jun, 2014 07:19 am
@Phloow,
Another reason to end immigration.
Phloow
 
  1  
Reply Sun 1 Jun, 2014 07:44 am
@bobsal u1553115,
End of question 5:
Initially, there are 11 workers employed in Home, but only 3 workers in Foreign.
Find the effect of free movement of labor from Home to Foreign on employment,
production, real wages, and the income of landowners in each country.
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