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The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (*). The horizontal axis represents
The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (*). The horizontal axis represents the total world labor force. The workers employed in Home are measured from the left, the workers employed in Foreign from the right. The left vertical axis shows the marginal product of labor in Home; the right vertical axis shows the marginal product of labor in Foreign. Suppose the initial allocation of labor has 0L3 workers in Home and 0*L3 workers in Foreign. Given this initial allocation, labor can be expected to migrate from Foreign to Home until {I} A. the Home and Foreign labor forces are equalized. B. real wages are equalized in the two countries. {I} C. nominal wages are equalized in the two countries. '11:} D. workers in Home use the political process to stop it. + MPL MPL DO B A E: . C 0 Home L2 1 Foreign O employment employment Total world labor force
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