B. One Good, Two Factor Mobility Model. In the diagram below show how free trade in both unskilled and skilled labor leads to factor price equalization and increased output in both countries starting from the no trade endowment point E. You need to show (i) The original isoquants at the endowment point, (ii) the original wage rate ratios of skilled to unskilled workers, (iii) the resulting isoquants with trade, (iv) the migration pattern between the home and foreign countries, and (v) mention the impact on wages in H. LU • E Ls Он Of

B. One Good, Two Factor Mobility Model. In the diagram below show how free trade in both unskilled and skilled labor leads to factor price equalization and increased output in both countries starting from the no trade endowment point E. You need to show (i) The original isoquants at the endowment point, (ii) the original wage rate ratios of skilled to unskilled workers, (iii) the resulting isoquants with trade, (iv) the migration pattern between the home and foreign countries, and (v) mention the impact on wages in H. LU • E Ls Он Of

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter30: The Labor Market

Section: Chapter Questions

Problem 13E

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Explain the effects of migration of labour between two nations. Use the figure below and the marginal product of labour concept to explain your answer.
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