Question
Show all your work. No credit will be given for unsupported answers. The demand for low-skilled labor in a domestic industry is LD= 40 -
Show all your work. No credit will be given for unsupported answers.
The demand for low-skilled labor in a domestic industry is LD= 40 - 2W, where W is the wage rate and LD is a number of workers (in thousands) that the firms want to hire at wage W. The supply of native workers is LN= W - 5, where LN is the number of native workers (in thousands) willing to take a job at wage W. Suppose that the total supply of workers, including both native and immigrant workers, is LT= 3W - 5.
(a) What is the equilibrium wage and level of employment without immigration?
(b) What is the equilibrium wage and level of employment with immigration?
(c) How many native workers will be hired? How many immigrant workers will be hired?
(d) If all immigrant workers are deported, by how much will the number of employed native workers increase?
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