1. Demand for labor in a country is given by Ld = 80 − Zw. Z...

1. Demand for labor in a country is given by Ld = 80 − Zw. Z is a factor that affects the elasticity of the demand for labor. When Z is small, labor demand is inelastic, and when Z is large, labor demand is elastic. Domestic labor supply is given by Ls(D) = w and immigrant labor supply is given by Ls(I) = 20.

(a) Find the market equilibrium wage and employment when no immigration is allowed.

(b) Find the market equilibrium wage and employment when there are no restrictions on immigration. How much of the employment is from domestic workers?

(c) How much higher is the wage and employment for domestic workers in part a than part b? How does this gap depend on Z?

Multiple Choice From practice problem 1c: If Z = 1, what is the effect of immigration on wages for domestic workers?

A.Increase by $10

B.no effect

C.decrease by $20

D.reduce by $10

(I just need the answer for the multiple choice part)

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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