The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (*). The horizontal axis represents the total world labor force. The workers employed in Home are measured from the left, the workers employed in Foreign from the right. The left vertical axis shows the marginal product of labor in Home; the right vertical axis shows the marginal product of labor in Foreign. Suppose the initial allocation of labor has OL³ workers in Home and 0*L³ workers in Foreign. Given this initial allocation, labor can be expected to O A. migrate from Home to Foreign. O B. remain situated where it currently resides. OC. migrate from Foreign to Home. OD. migrate toward the higher nominal wage. From the perspective of the world economy, this migration of labor is desirable since O A. total world output rises by BAC. OB. total world output rises by L²L³DA. OC. total world output rises by DAE. O D. Foreign rids itself of disgruntled workers. MPL D E B MPL 0 Home employment L³ L²L¹ Foreign - Total world labor force 0 employment Q

The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (). The horizontal axis represents the total world labor force. The workers employed in Home are measured from the left, the workers employed in Foreign from the right. The left vertical axis shows the marginal product of labor in Home; the right vertical axis shows the marginal product of labor in Foreign. Suppose the initial allocation of labor has OL³ workers in Home and 0L³ workers in Foreign. Given this initial allocation, labor can be expected to O A. migrate from Home to Foreign. O B. remain situated where it currently resides. OC. migrate from Foreign to Home. OD. migrate toward the higher nominal wage. From the perspective of the world economy, this migration of labor is desirable since O A. total world output rises by BAC. OB. total world output rises by L²L³DA. OC. total world output rises by DAE. O D. Foreign rids itself of disgruntled workers. MPL D E B MPL 0 Home employment L³ L²L¹ Foreign - Total world labor force 0 employment Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The figure to the right illustrates the causes and effects of international labor mobility between two countries, Home and Foreign (*).
The horizontal axis represents the total world labor force. The workers employed in Home are measured from the left, the workers
employed in Foreign from the right.
The left vertical axis shows the marginal product of labor in Home; the right vertical axis shows the marginal product of labor in
Foreign.
Suppose the initial allocation of labor has OL³ workers in Home and 0*L³ workers in Foreign. Given this initial allocation, labor can
be expected to
O A. migrate from Home to Foreign.
OB. remain situated where it currently resides.
OC. migrate from Foreign to Home.
OD. migrate toward the higher nominal wage.
From the perspective of the world economy, this migration of labor is desirable since
OA. total world output rises by BAC.
OB. total world output rises by L²L³DA.
OC. total world output rises by DAE.
OD. Foreign rids itself of disgruntled workers.
MPL
0 Home
D
E
employment
A
L³ L²
B
*
- Total world labor force
MPL
1 Foreign
employment
0

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