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In Home and Foreign there are two factors each of production, land, and labor used to produce only one good. The land supply in each country and the technology of pro- duction are exactly the same. The marginal product of labor in each country depends on employment as follows:

Number of Workers Employed

Marginal Product of Last Worker

1 20
2 19
3 18
4 17
5 16
6 15
7 14
8 13
9 12
10 11
11 10

Initially, there are 11 workers employed in Home, but only 3 workers in Foreign.

Find the effect of free movement of labor from Home to Foreign on employment, production, real wages, and the income of landowners in each country.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M91529256
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