Need help ASAP, will give thumbs up: QUESTION: Let ES0 represent the average skill level of people who choose to stay in the source country and let ES1 represent the average skill level of people who choose to immigrate to the United States. When C decreases, how does this affect ES0 and ES1? ANSWER CHOICES: ES0 and ES1 both decrease ES0 and ES1 both increase ES0 and ES1 both remain unchanged ES0 decreases and ES1 increases ES0 increases and ES1 decreases
Need help ASAP, will give thumbs up: QUESTION: Let ES0 represent the average skill level of people who choose to stay in the source country and let ES1 represent the average skill level of people who choose to immigrate to the United States. When C decreases, how does this affect ES0 and ES1? ANSWER CHOICES: ES0 and ES1 both decrease ES0 and ES1 both increase ES0 and ES1 both remain unchanged ES0 decreases and ES1 increases ES0 increases and ES1 decreases
Chapter17: Income, Poverty, And Health Care
Section: Chapter Questions
Problem 1P
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Need help ASAP, will give thumbs up:
QUESTION: Let ES0 represent the average skill level of people who choose to stay in the source country and let ES1 represent the average skill level of people who choose to immigrate to the United States. When C decreases, how does this affect ES0 and ES1?
ANSWER CHOICES:
ES0 and ES1 both decrease
ES0 and ES1 both increase
ES0 and ES1 both remain unchanged
ES0 decreases and ES1 increases
ES0 increases and ES1 decreases
![Consider the following model of immigration to the United States. Potential migrants originate
in country 0, the source country. For each individual, lifetime income if they remain in the source
country (denoted by YO) is given by the equation
YO = MO + RO(S)
%3D
where S measures the skill level of each person, with positive values of S indicating above-average
skills, negative values of S indicating below-average skills, and S equal to zero for the average
person. Lifetime income if a person immigrates to the United States (denoted by Y1) also varies
with skills, as described by the equation
Y1 = M1 + R1(S)
The parameters MO, M1, RO, and R1 characterize the lifetime income distributions in the two
countries. Let C represent the total costs incurred when immigrating to the United States,
including any psychic costs associated with leaving one's home country. Assume the following:
MO>M1-C>0
and
RO>R1>0
Assume that individuals seek to maximize their lifetime income.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad379d38-5c16-454b-8f83-884809d4cf46%2F07b7e900-161c-4399-8287-b97b0399dd1a%2F1ye777e_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the following model of immigration to the United States. Potential migrants originate
in country 0, the source country. For each individual, lifetime income if they remain in the source
country (denoted by YO) is given by the equation
YO = MO + RO(S)
%3D
where S measures the skill level of each person, with positive values of S indicating above-average
skills, negative values of S indicating below-average skills, and S equal to zero for the average
person. Lifetime income if a person immigrates to the United States (denoted by Y1) also varies
with skills, as described by the equation
Y1 = M1 + R1(S)
The parameters MO, M1, RO, and R1 characterize the lifetime income distributions in the two
countries. Let C represent the total costs incurred when immigrating to the United States,
including any psychic costs associated with leaving one's home country. Assume the following:
MO>M1-C>0
and
RO>R1>0
Assume that individuals seek to maximize their lifetime income.
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