The figure describes the effect of immigration on unemployment in the labour market. The labour market equilibrium is at A and C before and after the influx of immigration, respectively. Based on this figure, which of the following statements is correct? Real wage 13- Wage-setting curve (before immigration) Wage-setting curve (after immigration) Labour force (before Immigration) Price- setting curve Labour force (after immigration) 4.5 5 5.5 Employment, millions of workers 6 Firms claim a higher markup in the new equilibrium. The unemployment rate is unchanged in the new equilibrium. All incumbent workers are no worse off in the new equilibrium. All incumbent workers are unaffected while the labour market adjusts.

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: Earnings And Discrimination
Section: Chapter Questions
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The figure describes the effect of immigration on unemployment in the labour
market. The labour market equilibrium is at A and C before and after the influx of
immigration, respectively. Based on this figure, which of the following statements is
correct?
Real wage
40
20
3
3
Wage-setting
curve (before
immigration)
B
Wage-setting
curve (after)
immigration)
Labour
force (before
Immigration)
Price-
setting
curve
Labour
force (after
immigration)
4
4.5
5
5.5
Employment, millions of workers
6
Firms claim a higher markup in the new equilibrium.
The unemployment rate is unchanged in the new equilibrium.
All incumbent workers are no worse off in the new equilibrium.
All incumbent workers are unaffected while the labour market adjusts.
Transcribed Image Text:The figure describes the effect of immigration on unemployment in the labour market. The labour market equilibrium is at A and C before and after the influx of immigration, respectively. Based on this figure, which of the following statements is correct? Real wage 40 20 3 3 Wage-setting curve (before immigration) B Wage-setting curve (after) immigration) Labour force (before Immigration) Price- setting curve Labour force (after immigration) 4 4.5 5 5.5 Employment, millions of workers 6 Firms claim a higher markup in the new equilibrium. The unemployment rate is unchanged in the new equilibrium. All incumbent workers are no worse off in the new equilibrium. All incumbent workers are unaffected while the labour market adjusts.
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