Consider a hypothetical economy in which only computers and shoes are produced. If two resources are being used, labor and capital, then any increase in immigration in the long run:
A) will decrease wages in the shoe industry.
B) will decrease wages in the computer industry.
C) will increase wages in the shoe industry.
D) will keep wages constant because marginal products do not change.

Question

Quizplus · Accepted Answer

In the long run, the economy can adjust to changes in labor supply through capital accumulation and technological advancements, keeping marginal products and thus wages constant.

Consider a Hypothetical Economy in Which Only Computers and Shoes