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Chapter 14: Q. 11 (page 350)

If immigration is reduced, what is the impact on the wage for low-skilled labor? Explain.

Short Answer

Expert verified

The impact is that reducing the amount of immigrants would cause the low-skill labor supply curve to shift back to the left.

Step by step solution

01

Definition

Immigration:

Immigration is the worldwide motion of human beings to a destination country where they may be neither natives nor residents so that you can establish themselves as permanent citizens or naturalized citizens.

02

Explanation

If a substantial proportion of immigrants have low skills, limiting the number of immigrants would shift the low-skill labor supply curve back to the left, raising the equilibrium wage for low-skill labor. Although immigration has a minor impact on average salaries, the effects are not uniformly distributed: low-wage workers are more likely to lose their jobs, while middle- and high-wage individuals are more likely to benefit.

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Most popular questions from this chapter

How does the presence of a labor union change negotiations between employers and workers?

Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union.

Wage per hourQuantity of workers demandedQuantity of workers supplied
\(1412,0006,000
\)1610,0007,000
\(188,0008,000
\)206,0009,000
\(224,00010,000
\)242,00011,000
  1. What would the equilibrium wage and quantity be in this market if no union existed?
  2. Assume that the union has enough negotiating power to raise the wage to $4 per hour higher than it would otherwise be. Is there now excess demand or excess supply of labor?

Compared with the share of workers in most other high-income countries, is the share of U.S. workers whose wages are determined by union bargaining higher or lower? Why or why not?

What factors can explain the relatively small effect of low-skilled immigration on the wages of low-skilled workers?

Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the firm can sell output in the perfectly competitive market where it operates.

LaborMarginal product of LaborPrice of the product
110\(4
28\)4
37\(4
45\)4
53\(4
61\)4
  1. What is the value of the marginal product at each level of labor?
  2. If the firm operates in a perfectly competitive labor market where the going market wage is $12, what is the firm鈥檚 profit maximizing level of employment?
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