Consider a hypothetical economy in which only
Computers and shoes are produced and in which
Computer production is capital intensive compared with
Shoe production.If two resources are being used, labor
And capital, then any increase in immigration in the
Long run:
A)will cause the capitallabor ratio to increase in the computer industry.
B)will cause the capitallabor ratio to increase in the shoe industry.
C)will cause the capitallabor ratio to increase in both the industries.
D)will increase the number of workers employed in the shoe industry.

Question

Consider a hypothetical economy in which only
Computers and shoes are produced and in which
Computer production is capital intensive compared with
Shoe production.If two resources are being used, labor
And capital, then any increase in immigration in the
Long run:
A)will cause the capital­labor ratio to increase in the computer industry.
B)will cause the capital­labor ratio to increase in the shoe industry.
C)will cause the capital­labor ratio to increase in both the industries.
D)will increase the number of workers employed in the shoe industry.

Quizplus · Accepted Answer

In the long run, an increase in immigration will increase the labor supply, leading to more workers being employed, particularly in the labor-intensive shoe industry.

Consider a Hypothetical Economy in Which Only