Consider two distinct labor markets in two provinces, Gaziantep and Trabzon. Initially, the "native" wage Wo is the same in both provinces, with equilibrium occurring at the intersection of labor supply and demand curves in each of the provinces. Suppose that Gaziantep receives an influx of Syrian immigrants. 1. Assume that immigrants and natives are "perfect substitutes" in production and immigration between the two provinces is "costless." Firms are not allowed to move between provinces. Describe the new equilibrium in the labor market for natives in each of the provinces using labor supply and demand curves. Explain your reasoning. 2. Assume that immigrants and natives are "perfect complements" in production and immigration between the two provinces is "costless." Firms are not allowed to move between provinces. Describe the new equilibrium in the labor market for natives in each of the provinces using labor supply and demand curves. Explain your reasoning. 3. Assume that immigrants and natives are "perfect substitutes" in production. Immigration between the two provinces is not allowed, but it is costless for the firms to move between Gaziantep and Trabzon. Describe the new equilibrium in the labor market for natives in each of the provinces using labor supply and demand curves. Explain your reasoning.
Consider two distinct labor markets in two provinces, Gaziantep and Trabzon. Initially, the "native" wage Wo is the same in both provinces, with equilibrium occurring at the intersection of labor supply and demand curves in each of the provinces. Suppose that Gaziantep receives an influx of Syrian immigrants. 1. Assume that immigrants and natives are "perfect substitutes" in production and immigration between the two provinces is "costless." Firms are not allowed to move between provinces. Describe the new equilibrium in the labor market for natives in each of the provinces using labor supply and demand curves. Explain your reasoning. 2. Assume that immigrants and natives are "perfect complements" in production and immigration between the two provinces is "costless." Firms are not allowed to move between provinces. Describe the new equilibrium in the labor market for natives in each of the provinces using labor supply and demand curves. Explain your reasoning. 3. Assume that immigrants and natives are "perfect substitutes" in production. Immigration between the two provinces is not allowed, but it is costless for the firms to move between Gaziantep and Trabzon. Describe the new equilibrium in the labor market for natives in each of the provinces using labor supply and demand curves. Explain your reasoning.
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
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Transcribed Image Text:Consider two distinct labor markets in two provinces, Gaziantep and Trabzon. Initially, the "native" wage
wo is the same in both provinces, with equilibrium occurring at the intersection of labor supply and
demand curves in each of the provinces. Suppose that Gaziantep receives an influx of Syrian immigrants.
1. Assume that immigrants and natives are "perfect substitutes" in production and immigration
between the two provinces is "costless." Firms are not allowed to move between provinces. Describe
the new equilibrium in the labor market for natives in each of the provinces using labor supply and
demand curves. Explain your reasoning.
2. Assume that immigrants and natives are "perfect complements" in production and immigration
between the two provinces is "costless." Firms are not allowed to move between provinces. Describe
the new equilibrium in the labor market for natives in each of the provinces using labor supply and
demand curves. Explain your reasoning.
3. Assume that immigrants and natives are "perfect substitutes" in production. Immigration between
the two provinces is not allowed, but it is costless for the firms to move between Gaziantep and
Trabzon. Describe the new equilibrium in the labor market for natives in each of the provinces using
labor supply and demand curves. Explain your reasoning.
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