Question

In: Economics

There is debate on the e ects of immigration of wages. Answer the following using demand...

There is debate on the e ects of immigration of wages. Answer the following using demand and supply graphs.

a) Show how an increase in immigration can decrease wages.

b) Show how an increase in immigration can increase wag

Solutions

Expert Solution

a) An increase in immigration will result in an increase in labour supply in the economy since now there are more people who are part of the labour force and actively looking for jobs. As a result, the supply curve for labour will shift outwards, resulting in a fall in wage rates for all labour.

[This is also because any labour can now easily be replaced with another and hence he has no bargaining power].

b) An immigration of more people can also lead to an increase in wages if seen from the demand perspective. If more people enter the economy, there will be a higher demand for goods and services. In order to produce this demand, more people will be hired. Thus, the demand curve will shift rightwards and will result in an increase in wages.

[ It will also be the case when we assume that the people who immigrate to the new country are not job-seeking but entrepreneurs (say)].

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Does immigration affect wages and jobs in the US? Are Americans hurt by immigration from countries...
Does immigration affect wages and jobs in the US? Are Americans hurt by immigration from countries that offer cheaper labor? Does immigration increase crime and cost the taxpayers money?
Suppose there are two countries, the U.S. and Mexico. Before immigration, wages are higher in the...
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...
Suppose there are two countries, the U.S. and Mexico. Before immigration, wages are higher in the...
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...
A discussion of the political debacle of the current immigration debate (pro and con) which has...
A discussion of the political debacle of the current immigration debate (pro and con) which has left America divided along racial, ethnic, religious, and political lines;
Debate the supply v. demand debate of guns. Should there be an effort to limit the...
Debate the supply v. demand debate of guns. Should there be an effort to limit the manufacturing of guns given the 97 million available? What is the students’ interpretation of the Second Amendment’s “right to bear arms” statement?
4. Using a supply-and-demand diagram for the labor market, illustrate how a reduction in immigration could...
4. Using a supply-and-demand diagram for the labor market, illustrate how a reduction in immigration could improve the wage for low-skill labor.
Defend the reason for the following, using elasticity of demand as the basis for your answer....
Defend the reason for the following, using elasticity of demand as the basis for your answer. Motivate your answer with the aid of examples. 2.1.1 Narrowly defined markets tend to be associated with a more price elastic demand than broadly defined markets. (6) 2.1.2 Goods tend to have more price elastic demand over large time horizons. (6) 2.1.3 Necessities tend to have relatively inelastic demands, whereas luxuries have relatively inelastic demand. (6) 2.2 Read the scenario below and answer the...
Answer the following questions for the U.S. and Russia: What is the country’s overall immigration policy?...
Answer the following questions for the U.S. and Russia: What is the country’s overall immigration policy? Do U.S. and other foreign companies operate inside of the country? If so, do these firms contribute to the country’s exports?
Answer the questions below using the following equations for supply and demand where Q is the...
Answer the questions below using the following equations for supply and demand where Q is the number of computers and P is the price per computer. QD (P) = 60 - 2P C(Q) = 15Q a. Suppose the government determines that a fee of $2 per computer will be implemented to cover pollution externalities in production. What will be the price and quantity under perfect competition? Under monopoly? b. Do consumers LOSE more surplus from the $2 fee under monopoly...
Lesson 3.3 DB - Wages and Supply and Demand Please answer both questions to receive full...
Lesson 3.3 DB - Wages and Supply and Demand Please answer both questions to receive full credit for this assignment.  Use your Unit 3 Notes Guide to help you craft your answers.  Be sure to remember to use economic evidence from the lesson to support your opinion. 1. How do we decide how much each person in society should be paid? Why do some jobs receive high wages while others do not? Do wages reflect what types of jobs our society values?...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT