Question 3 Look at the table below giving the production function in a hypothetical country. # of workers 1 Total Output 200 2 370 3 520 4 660 5 780 6 890 7 995 8 1090 9 1170 10 1220 Marginal Output Average Output a) b) c) d) f) Complete the columns for marginal output and average output. Now suppose there are two countries with 2 factors of production labor and capital. Each country has a fixed amount capital and labor. Suppose Home is capital abundant and has only 2 units of labor while Foreign is labor abundant and has 8 units of labor. Calculate the rewards of labor and capital in each country. Now suppose the two countries open their borders to migration. Which is going to be the host country for migration and which is going to be the source country? How many workers are going to migrate? Calculate the impact of migration on the following: i) wages of native workers in the host country; ii) wages of workers left behind in the source country; iii) impact on capital owners in the host country; impact on capital owners in the source country; v) world output. In light of the answer to part d) above, state who is going to oppose migration and who is going to support it. If you were a policymaker interested in maximizing world output, would you support or oppose migration?
Question 3 Look at the table below giving the production function in a hypothetical country. # of workers 1 Total Output 200 2 370 3 520 4 660 5 780 6 890 7 995 8 1090 9 1170 10 1220 Marginal Output Average Output a) b) c) d) f) Complete the columns for marginal output and average output. Now suppose there are two countries with 2 factors of production labor and capital. Each country has a fixed amount capital and labor. Suppose Home is capital abundant and has only 2 units of labor while Foreign is labor abundant and has 8 units of labor. Calculate the rewards of labor and capital in each country. Now suppose the two countries open their borders to migration. Which is going to be the host country for migration and which is going to be the source country? How many workers are going to migrate? Calculate the impact of migration on the following: i) wages of native workers in the host country; ii) wages of workers left behind in the source country; iii) impact on capital owners in the host country; impact on capital owners in the source country; v) world output. In light of the answer to part d) above, state who is going to oppose migration and who is going to support it. If you were a policymaker interested in maximizing world output, would you support or oppose migration?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter1: Welcome To Economics!
Section: Chapter Questions
Problem 20CTQ: Suppose you have a team of two workers: one is a baker and one is a chef. Explain why file kitchen...
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Transcribed Image Text:Question 3
Look at the table below giving the production function in a hypothetical country.
# of workers
1
Total Output
200
2
370
3
520
4
660
5
780
6
890
7
995
8
1090
9
1170
10
1220
Marginal Output
Average Output
a)
b)
c)
d)
f)
Complete the columns for marginal output and average output.
Now suppose there are two countries with 2 factors of production labor and capital. Each
country has a fixed amount capital and labor.
Suppose Home is capital abundant and has only 2 units of labor while Foreign
is labor abundant and has 8 units of labor. Calculate the rewards of labor and capital in
each country.
Now suppose the two countries open their borders to migration. Which is going
to be the host country for migration and which is going to be the source country? How
many workers are going to migrate?
Calculate the impact of migration on the following: i) wages of native workers
in the host country; ii) wages of workers left behind in the source country; iii) impact on
capital owners in the host country; impact on capital owners in the source country; v)
world output.
In light of the answer to part d) above, state who is going to oppose migration
and who is going to support it.
If you were a policymaker interested in maximizing world output, would you
support or oppose migration?
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