refer to the following information given in the table below. There are initially 28 workers in market A and 63 workers in market B as indicated by the shaded cells. All markets are assumed competitive and there is perfect information and costless migration; jobs in markets A and B are identical in all nonwage aspects.

-After all adjustments to equilibrium take place in this market,we expect to find that:
A)the total value of output is increased,but economic efficiency is reduced
B)both the total value of output and economic efficiency are increased
C)both the total value of output and economic efficiency are reduced
D)changes in the total value of output and economic efficiency cannot be determined

Question

refer to the following information given in the table below. There are initially 28 workers in market A and 63 workers in market B as indicated by the shaded cells. All markets are assumed competitive and there is perfect information and costless migration; jobs in markets A and B are identical in all nonwage aspects.

-After all adjustments to equilibrium take place in this market,we expect to find that:

-After all adjustments to equilibrium take place in this market,we expect to find that:
A)the total value of output is increased,but economic efficiency is reduced 
B)both the total value of output and economic efficiency are increased 
C)both the total value of output and economic efficiency are reduced 
D)changes in the total value of output and economic efficiency cannot be determined

Quizplus · Accepted Answer

Assuming all workers are identical in terms of skill and productivity, wages will be equalized across both markets in the long run due to costless migration. This will lead to an increase in total output as all firms will have access to the same pool of workers. At the same time, economic efficiency will also increase as markets become more competitive and resources are allocated more efficiently. Therefore, both the total value of output and economic efficiency are increased.

Refer to the Following Information Given in the Table Below