Suppose labor demand for low-skilled workers in the United States is w = 35 – 0.2Ewhere E is the number of workers (in millions) and w is the hourly wage. There are 100 million domestic U.S. low-skilled workers who supply labor inelastically. If the U.S. opened its borders to immigration, 25 million low-skill immigrants would enter the U.S. and supply labor inelastically. What is the market-clearing wage if immigration is not allowed? What is the market-clearing wage with open borders?

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 5P
icon
Related questions
Question
100%

Suppose labor demand for low-skilled workers in the United States is w = 35 – 0.2Ewhere E is the number of workers (in millions) and w is the hourly wage. There are 100 million domestic U.S. low-skilled workers who supply labor inelastically. If the U.S. opened its borders to immigration, 25 million low-skill immigrants would enter the U.S. and supply labor inelastically.

  1. What is the market-clearing wage if immigration is not allowed?
  2. What is the market-clearing wage with open borders?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Labor Standards
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Macroeconomics: Principles and Policy (MindTap Co…
Macroeconomics: Principles and Policy (MindTap Co…
Economics
ISBN:
9781305280601
Author:
William J. Baumol, Alan S. Blinder
Publisher:
Cengage Learning
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning