In the Accompanying Graphs, the Pre-Migration Labor Force in Country

question 41

Multiple Choice

In the accompanying graphs, the pre-migration labor force in country A is 0 d and in country B it is 0 u. The migration of labor from low-income country B to high-income country A will

• A)increase wages in country A and decrease wages in country B.
• B)decrease wages in country A and decrease wages in country B.
• C)decrease wages in country A and increase wages in country B.
• D)increase wages in country A and increase wages in country B.

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Definitions:

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogenous product.

Cost Data

Details about the costs associated with creating a product or service, such as the expenses for materials, workforce, and indirect costs.

Purely Competitive Producer

A producer in a market structure characterized by many small firms, homogeneous products, and free entry and exit, leading to zero economic profit in the long run.

Economic Profit

The differential amount left after subtracting all types of costs, both seen and unseen, from the total income.