Suppose labor demand for low-skilled workers in the United States is w = 30 - 0.2L where L is the number of workers (in millions) and w is the hourly wage. There are 100 million domestic U.S. low-skilled workers who supply labor perfectly inelastically. If the U.S. opened its borders to immigration, 30 million low-skill immigrants would enter the U.S. and supply labor perfectly inelastically.

(5 points each)

(a) What would be the equilibrium wage if immigration is banned?

(b) What would be the equilibrium wage with open borders?

(c) How much is the immigration surplus with open borders?

(d) How much of the earnings of domestic workers is lost to the producer surplus of domestic firms?