Use the segmented labor market model - where one sector is the US (US), the other is Mexico (M) - to answer the following:

(a) Depict graphically the initial equilibrium in each sector assuming Wus > Wm. Both sectors are in equilibrium (i.e., there L = L' in each sector), but the wages are different due to a lack of mobility across countries.

(b) Suppose labor becomes perfectly mobile across countries due to a relaxation of immigration restrictions and each sector adjusts to the new equilibrium. Depict graphically the new equilibrium in each country. How does the new equilibrium compare in terms of (i) employment, (ii) unemployment, and (iii) the size of the labor force in each country?

(c) Returning to part (a), suppose instead that firms become perfectly mobile across countries, but labor remains immobile, and each sector adjusts to the new equilibrium. Depict graphically the new equilibrium in each country. How does the new equilibrium compare in terms of (i) employment, (ii) unemployment, and (iii) the size of the labor force in each country?