In an Economy with Flexible Prices, Competitive Factor Markets and Fixed

question 61

Essay

In an economy with flexible prices, competitive factor markets and fixed supplies of the factors of production, graphically illustrate the impact of a change in immigration policy in a country that permits a huge influx of foreign workers into the labor market, ceteris paribus. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curve's shift; and v. the terminal equilibrium values. Explain in words how the equilibrium values of labor, the real wage, saving, investment, and the real interest rate change.

---

Definitions:

Medical Model

A framework for understanding diseases and disorders by categorizing them through diagnosis, treatment, and prognosis based on biological causes.

Abnormal Behaviour

Patterns of emotion, thought, or action deemed pathological for varying reasons, including statistical rarity, violation of social norms, or personal distress.

Disease

A disorder or malfunction of the mind or body leading to symptoms, dysfunction, or distress, not directly resulting from physical injury.

Etiology

The study of the causes or origins of diseases or behavioral conditions.