1. In Home and Foreign there are two factors of production, land and labor, used to produce...

Question:

1. In Home and Foreign there are two factors 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 Employed 1

2 3

4 5

6 7

8 9

10 11 Marginal Product of Last Worker 20 19 18 17 16 15 14 13 12 11 10 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.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

International Economics Theory And Policy

ISBN: 9780321116399

6th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz

Question Posted: