Suppose that workers immigrate to Minnesota from Canada. Which of the following correctly describes what would happen in the market for labor in Minnesota?
A)The equilibrium wage would increase, and the quantity of labor would increase.With more workers, the added output from an extra worker is larger.
B)The equilibrium wage would decrease, and the quantity of labor would decrease.With fewer workers, the added output from an extra worker is smaller.
C)The equilibrium wage would decrease, and the quantity of labor would increase.With more workers, the added output from an extra worker is smaller.
D)The equilibrium wage would decrease, and the quantity of labor would increase.With more workers, the added output from an extra worker is larger.

Question

Quizplus · Accepted Answer

An increase in the supply of labor (due to immigration) would lead to a decrease in the equilibrium wage because of the higher availability of workers. The quantity of labor would increase because more workers are available for employment. The added output from an extra worker is smaller due to the law of diminishing returns.

Suppose That Workers Immigrate to Minnesota from Canada