Answer to Question #321002 in Microeconomics for Joel

Question

Show how the migration of workers from country A to country B will affect the labour supply, labour demandand the equilibrium wage of bothcountries.

Answer 1

When workers migrate from country A to B, the supply of labor in country A decreases while the supply of labor in country B increases. A decrease in supply of labor in country A increases demand leading to higher wages while an increase in supply of labor in country B lowers demand leading to lower wages.