In a Competitive Industry,it Takes a Fixed Ratio of One

question 15

Multiple Choice

In a competitive industry,it takes a fixed ratio of one skilled worker and two unskilled workers to produce a unit of output.If the immigration of unskilled workers lowers the wage of unskilled workers,it will likely

• A) increase the demand for skilled workers due to the scale effect.
• B) increase the demand for skilled workers due to the substitution effect.
• C) decrease the wage but increase the employment of domestic unskilled workers.
• D) All of the above will occur.

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