Assumptions: (1) The demand for labor in Alphania and Betania are as shown by DA

Question

Assumptions: (1) The demand for labor in Alphania and Betania are as shown by DA and DB, respectively; (2) Alphania's native labor force is F and that of Betania is g; (3) Wage L in Alphania is equal to Wage in in Betania; and (4) full employment exists in both countries. Refer to the above diagram and assumptions. If migration is costless and unimpeded: migration will cause the average level of wages to fall in Alphania. no migration will occur. fg workers will move from Betania to Alphania. GF workers will move from Alphania to Betania.

Explanation / Answer

b. no migration will occur.

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