11. If the supply of unskilled domestic labor and the supply of unskilled immigr
ID: 1103787 • Letter: 1
Question
11.
If the supply of unskilled domestic labor and the supply of unskilled immigrant labor are both perfectly inelastic, then the typical market equilibrium will be such that:
A.
Immigrant labor will replace domestic labor.
B.
The perfectly inelastic supply of unskilled domestic labor will prevent the hiring of any unskilled immigrant labor.
C.
The post-immigration equilibrium will be associated with lower wages being paid to the unskilled immigrants compared to the wages paid to unskilled domestic labor.
D.
Wages paid to unskilled domestic labor will be less under immigration than under no immigration.
E.
Labor demand will shift out with increased immigration.
12.
If the supply of unskilled domestic labor and the supply of unskilled immigrant labor are both perfectly inelastic, then the immigration surplus to the domestic economy can be estimated by:
A.
The number of immigrants times the new wage rate.
B.
The total number of workers under immigration times the difference in the old and new wage rates.
C.
One half of the number of immigrants times the new wage rate.
D.
One half of the number of immigrants times the difference in the old and new wage rates.
E.
National income minus government spending on immigration programs.
11.
If the supply of unskilled domestic labor and the supply of unskilled immigrant labor are both perfectly inelastic, then the typical market equilibrium will be such that:
A.
Immigrant labor will replace domestic labor.
B.
The perfectly inelastic supply of unskilled domestic labor will prevent the hiring of any unskilled immigrant labor.
C.
The post-immigration equilibrium will be associated with lower wages being paid to the unskilled immigrants compared to the wages paid to unskilled domestic labor.
D.
Wages paid to unskilled domestic labor will be less under immigration than under no immigration.
E.
Labor demand will shift out with increased immigration.
Explanation / Answer
11. D. Wages paid to unskilled domestic labor will be less under immigration than under no immigration.
12. D. One half of the number of immigrants times the difference in the old and new wage rates.
Immigration will increase the labor supply by adding to the current labor force, hence wages will go down and subsequently labor demand will increase.
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