Question: Answer this question based on the following diagram. We W Log -100 L-$200 W=wage, LN =native labor supply, LM = immigrant labor supply; LD =HC

 Answer this question based on the following diagram. We W Log

Answer this question based on the following diagram. We W Log -100 L-$200 W=wage, LN =native labor supply, LM = immigrant labor supply; LD =HC labor demand (5) A. Identify the changes in the values of the following income measures as a result of immigration (1) vs. pre-immigration (PI). Refer to labeled areas (A, B,C,D,E) in the above graph. Change in: 1). Wage Income of Natives = 2) Income of Native Non-Wage Earners = 3) Net Change in Native Income = (3) B. Explain the meaning of the net change in native income (from your answer in A.3 ) in terms of the net contribution of immigrants to host country income. (3) C. Identify how the net change in native income is distributed between native wage earners vs. native nonwage earners. (5) D. Suppose a host country were considering changing its immigration policy to require immigrants to possess a high level of skills (education). What effect (increase, decrease or no effect) does this policy have on native income: 1.) Native unskilled wages 2.) Native skilled wages 3. Native non-wage income

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