Question
Using Demand and Supply Analysis, discuss, with the aid of diagrams, how (a) the computing revolution, (b) international trade, and (c) immigration have contributed to
Using Demand and Supply Analysis, discuss, with the aid of diagrams, how (a) the computing revolution, (b) international trade, and (c) immigration have contributed to rising income inequality in the US. For example, the import of goods made by low-skill workers abroad has depressed the prices of these goods in the US, causing low-skill workers in the US to become less attractive to firms (a worker is attractive to employers insofar as she can produce goods that will make her employer a large profit). The demand for low-skill workers in the US has, thus, decreased (leftward shift of the demand curve for low skill workers), causing their equilibrium wage to decrease. The wage gap between low-skill and high-skill workers has, as a result, widened, contributing to a rise in income inequality.
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