Suppose there are two countries, the U.S. and Mexico. Before
immigration, wages are higher in the U.S. Both countries produce
the manufactured good using labor and capital, and the agricultural
good using labor and land (i.e. labor is mobile, but land and
capital are specific factors). Assume that there is no change in
the prices of the manufactured and agricultural goods, and there is
no international trade in these goods, either. (4 points each, 12
points total)
Hint: you do...