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

question 111

Multiple Choice

In the accompanying graphs, the pre-migration labor force in country A is 0d and in country B it is 0u. Domestic output in country B will, after the emigration of labor,

• A)increase by area qrs.
• B)increase by area qtus.
• C)decrease by area qrs.
• D)decrease by area qtus.

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Definitions:

Budget Constraint

The cap on the selection of consumption options accessible to a consumer, influenced by their income level and the pricing of commodities.

Utility Maximizing

A principle in economics where individuals or entities aim to achieve the highest level of satisfaction with their choices, given their resources.

Indifference Curve

Represents a graph that shows a combination of two goods that give the consumer equal satisfaction and utility, thereby making the consumer indifferent.

Absolute Value

A mathematical function that describes the distance of a number on the real number line from zero, without considering direction.