1. Consider the one good model we analyzed in class. The marginal product of labor for the home and foreign country are described by the equations below. The labor force of the home country is L = 400 and the labor force for the foreign country is L* = 200. Denote labor employed in each country as LE and LE respectively. a. Assume initially that labor is immobile across countries. Draw the labor market diagram, where the horizontal axis is total world labor supply. Show the employment of labor in each country and calculate the wage for each country. b. Allow labor to be completely mobile across countries. Compute the exact employment for each

1. Consider the one good model we analyzed in class. The marginal product of labor for the home and foreign country are described by the equations below. The labor force of the home country is L = 400 and the labor force for the foreign country is L* = 200. Denote labor employed in each country as LE and LE respectively. a. Assume initially that labor is immobile across countries. Draw the labor market diagram, where the horizontal axis is total world labor supply. Show the employment of labor in each country and calculate the wage for each country. b. Allow labor to be completely mobile across countries. Compute the exact employment for each

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7
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