There are two neighboring countries, Rich and Poor. Figure 1 represents the labor market for each...

  

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There are two neighboring countries, Rich and Poor. Figure 1 represents the labor market for each country. All supply and demand curves are straight lines. Rich and Poor impose no restrictions on migration. a. Draw the international labor market diagram for the case where migration imposes a $3 per hour economic and psychological cost. Be sure to note the equilibrium wage in Rich, the equilibrium wage in Poor, the number of migrants, and the wage-intercepts of the two curves. b. What net impact does migration have on world welfare? (Give a S figure; partial credit for being able to identify the area in a graph.) c. Does migration benefit or hurt employers in Poor? How much? (Give a $ figure; partial credit for being able to identify the area in the graph. W ($/hr) 20 19 18 17 16 15 14 13 12 11 10 Figure 1 Rich W ($/hr) 20 19 18 17 16 15 14 16 18 20 22 24 L 15 17 19 21 23 (M) 14 13 12 11 10 Poor 16 22 24 26 28 18 20 17 19 21 23 25 27 29 30 L 31 (M) There are two neighboring countries, Rich and Poor. Figure 1 represents the labor market for each country. All supply and demand curves are straight lines. Rich and Poor impose no restrictions on migration. a. Draw the international labor market diagram for the case where migration imposes a $3 per hour economic and psychological cost. Be sure to note the equilibrium wage in Rich, the equilibrium wage in Poor, the number of migrants, and the wage-intercepts of the two curves. b. What net impact does migration have on world welfare? (Give a S figure; partial credit for being able to identify the area in a graph.) c. Does migration benefit or hurt employers in Poor? How much? (Give a $ figure; partial credit for being able to identify the area in the graph. W ($/hr) 20 19 18 17 16 15 14 13 12 11 10 Figure 1 Rich W ($/hr) 20 19 18 17 16 15 14 16 18 20 22 24 L 15 17 19 21 23 (M) 14 13 12 11 10 Poor 16 22 24 26 28 18 20 17 19 21 23 25 27 29 30 L 31 (M)