Question
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
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 the same. The marginal product of labor in each country depends on employment as follows:
Number of Workers Employed Marginal Product 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
Initially, there are only 6 workers employed in Home, but 8 workers in Foreign.
Find the effect of free movement of labor on employment, production, labor income, and the income of landowners in each country. (Provide before migration and after migration levels of employment, production, labor income, and the income of landowners).
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