There are only two countries in the world: Richland and Poorland. The labor demand curve in Richland is given by:

W = K 4L

Where W is the wage rate, K is a variable determined by accumulated capital stock in the country, and L is the labor force in the country. K = 450 is initially supplied by the capitalists in Richland. There is no depreciation.

There are 100 workers in Richland and seven capitalists.

All 100 workers are fully employed in Richland (L = 100).

Next to Richland, is Poorland. Poorland is poor and has an Arthur Lewis-type Dual Economy. A large number of workers in the agricultural sector there are not productive - they are disguised unemployed with a marginal product labor equal to zero. They are looking for jobs in Richland. Wage in Poorland is institutionally fixed at W = 5.

Due to a loophole in the immigration system, however, 10 workers were able to migrate to Richland.

As a result of this, Richland labor force increases from 100 to 110 (L = 110 now; the number of capitalists is still seven. All workers work no matter what the wage is. Capitalists as group supply K.)

Please show your calculations and answer the following questions. There is no need to draw any graph (you can draw the graph on your scratch paper, but do not upload.)

Due to the immigration of 10 workers from Poorland to Richland:

(a) What was the wage in Richland before immigration? After immigration?

(b) How much did the capitalists earn before immigration? After immigration?

(c) What was the national income of Richland before immigration? After immigration?