Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Nebraska and lowa both have labor demand for attorney given by the function, w=180,000-3E. Labor supply is perfectly inelastic in both the states. There
Nebraska and lowa both have labor demand for attorney given by the function, w=180,000-3E. Labor supply is perfectly inelastic in both the states. There are currently 20,000 attorneys in Nebraska and 15,000 in Iowa. If licensing requirements do not allow attorneys to practice in other states, each attorney in Nebraska earns $120,000 per year while each attorney in lowa earns $135,000 per year. If the two states enter into a cooperative relationship such that migration is allowed between the two states, what will be the equilibrium wage be for attorneys in Nebraska? [a] What will be the equilibrium wage be for attorneys in lowa? [b]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the equilibrium wage for attorneys in Nebraska and Iowa after the cooperative relationship is established and migration is allowed we nee...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started