Consider a situation in which there are just two countries: an Origin, and a Destination country. Wages in the origin country are given by: Wo=10+58 where s are years of schooling. Wages in the destination are given by: Wd=5+ 105. where s are years of schooling. Migrating from the Origin to the Destination country requires paying a xed cost of 10 corresponding to a Visa fee. a. Draw a figure in which the y-axis represents wages net of migration costs in each of the countries, and the x-axis represents years of schooling. b. How many years of schooling do you need to have so as to be indifferent between staying in the Origin country and moving to the destination Country? c. Are immigrants from the Origin to the Destination positively or negatively selected with respect to years of schooling? The politicians are worried that only immigrants with relatively little education are moving to the destination country. To remedy this issue, they decide to adopt a \"points-system" to decide which immigrants are allowed into the country. In particular, they decide that immigrants with more schooling should pay a lower Visa fee. The visa fee is set equal to: Visa Fee=10-2.55 That is, the more years of schooling you have, the lower the migration cost that you pay. d.What is the effect of the policy on the total number of immigrants? e. What is the effect of the policy on the years of schooling of immigrants? f. Does the policy have the intended effect? Explain Show transcribed image text