Question 1

Between 1870 and 1913, labor migration from the "Old World" (Europe) to the "New World" (the United States, Canada, and Australia) caused:

Accepted Answer

Labor migration from the Old World to the New World caused real wages to converge between the two regions. As laborers moved from areas with lower wages (Old World) to areas with higher wages (New World), the supply of labor increased in the higher-wage regions and decreased in the lower-wage regions. This caused real wages to rise more slowly in the New World and fall more slowly in the Old World, leading to a convergence of real wages between the two regions.

Question 2

The results of the influx of workers into Miami in 1980 as a consequence of the Mariel boat lift and from Russia to Israel in 1989 after the fall of the Soviet Union:

Accepted Answer

The influx of workers from the Mariel boatlift and from Russia to Israel did not lead to a reduction in wages in either Miami or Israel, contrary to many people's expectations. This outcome has been studied extensively and often cited in discussions about the impact of immigration on local labor markets.

Question 3

The short-run model that allows labor to move between industries while keeping other factors fixed is called the ____________ model.

Accepted Answer

The specific-factors model assumes that labor can move between industries, but capital and land are specific to certain industries. This allows for analysis of short-run changes in the economy where the allocation of labor can be adjusted, but other factors cannot. The Heckscher-Ohlin model and Ricardian models, on the other hand, assume that all factors are relatively fixed and cannot move between industries in the short run. Purchasing power parity is a theory related to international trade and exchange rates, and is not directly related to this question.

Question 4

The large-scale labor migration that occurred during 1870 to 1913 from Europe to America ____ the growth of wages in the destination nations and ____ the growth of wages in the source nations, thus leading to _____ of wages between the regions.

Accepted Answer

The large-scale labor migration led to the growth of wages in the destination nations (raised) due to the increase in demand for labor, but lowered the growth of wages in the source nations as the supply of labor increased. This resulted in convergence of wages between the regions, as the wage differential decreased.

Question 5

According to the specific-factors model, what happens when the supply of labor increases?

Accepted Answer

According to the specific-factors model, when the supply of labor increases, the wages of workers will decrease. This is because the increase in labor supply leads to a decrease in the marginal product of labor, which in turn causes a decrease in wages.

Question 6

If a person leaves Sweden to work in the United States, she is said to ________from Sweden and __________to the United States.

Accepted Answer

When a person leaves one country to move to another country, the person is said to emigrate from the original country and immigrate to the destination country. Therefore, the correct choice is B, emigrate from Sweden and immigrate to the United States.

Question 7

Emigration and immigration are:

Accepted Answer

Emigration refers to when workers (or people in general) leave a country, while immigration refers to when workers (or people) come into a country.

Question 8

In recent years, most immigrants to Europe:

Accepted Answer

The majority of immigrants to Europe in recent years are refugees fleeing war-torn countries, such as Syria, Afghanistan, and Iraq. This is due to ongoing conflicts and violence in these regions. While economic reasons may also play a factor in some cases, the refugee crisis has been the primary driver of immigration to Europe.

Question 9

When we use the specific-factors model to study immigration, we assume that:

Accepted Answer

In the specific-factors model, labor is assumed to be the only factor that is internationally mobile, while capital and land are considered specific to industries and immobile internationally. This allows us to analyze the impact of immigration on different industries and the overall economy.

Question 10

The Mariel boat lift of Cuban immigrants into Miami caused the:

Accepted Answer

The Mariel boat lift did increase the supply of unskilled labor in Miami, but it did not have a significant impact on the wages of other unskilled workers in the area. Therefore, option C is the best answer. Option A is incorrect because the boat lift actually increased the population of unskilled workers in Miami. Option B is incorrect because there is no evidence that the boat lift caused a decline in the population of skilled workers in Miami. Option D is incorrect because there is no evidence to suggest that the boat lift caused wages for all workers to decline.

Question 11

One example of emigration from Europe was during the period between 1870 and 1913. Wages grew rather than declined in the destination nations of the United States, Canada, and Australia. Why?

Accepted Answer

Wages rose due to the industrial revolution and higher levels of capital, which increased productivity and demand for labor, but the influx of immigrants slowed the rate of wage growth.

Question 12

Examples from Miami and Israel tell us that labor migration sometimes:

Accepted Answer

Studies from Miami and Israel have shown that labor migration does not necessarily have a negative impact on wages in the destination nation, as the influx of labor can be absorbed without reducing wages.

Question 13

To study labor migration using the specific-factors model, we assume ________ and ________ cannot move within the domestic economy, but we allow ________ to move both domestically and internationally.

Accepted Answer

In the specific-factors model, land and capital are considered immobile within the domestic economy, meaning they cannot easily move from one sector to another. Labor, on the other hand, is assumed to be mobile and can move both within the domestic economy and internationally. This model is used to analyze the impact of trade and labor migration on income distribution and the allocation of resources.

Question 14

The specific-factors model predicts that, after immigration, the equilibrium wage in both industries in the destination nation:

Accepted Answer

The specific-factors model suggests that an increase in labor supply (due to immigration) in the destination nation will lead to a decrease in the equilibrium wage in both industries, as the increased supply of labor reduces the marginal productivity of labor, thereby lowering wages.

Question 15

Which model can we use to analyze the short-run effects of migration?

Accepted Answer

The specific-factors model is the best choice for analyzing the short-run effects of migration as it explicitly takes into account the mobility of labor between different sectors within a country. In the short run, migration can cause labor shortages in certain sectors, leading to a decrease in output and an increase in wages in those sectors. Conversely, there may be an increase in output and a decrease in wages in industries that are not impacted by the migration. The specific-factors model can help economists understand the magnitude and distribution of these effects. The other models listed are more suited for analyzing long-run effects or the impact of international trade.

Question 16

Large-scale immigration into the New World, between 1870 and 1913 caused real wages to:

Accepted Answer

Large-scale immigration into the New World between 1870 and 1913 caused an increase in labor supply, leading to slower wage growth. Therefore, real wages increased at a slower pace in comparison with Europe.

Question 17

When the supply of labor increases, according to the specific-factors model, which of the following is likely to happen?

Accepted Answer

According to the specific-factors model, if the supply of labor increases, the wages for workers will decline as the increase in labor supply will lower the equilibrium wage rate. The model also suggests that the marginal product of labor increases only in the industry where the specific factor (i.e. capital, land) is used intensively, while it decreases in the industry where the specific factor is used less intensively. The model does not suggest that the number of workers employed will decrease or that the overall wage in the economy will increase in the short run.

Question 18

During the 1960s and 1970s, some northern European countries actively recruited migrants mainly from Turkey, the former Yugoslavia, Greece, and Italy. In contrast, today most migrants to Europe come from:

Accepted Answer

Today, the majority of migrants to Europe come from Syria, Iraq, and Afghanistan due to conflicts and instability in their home countries.

Question 19

Between 1870 and 1913, labor migration from the "Old World" (Europe) to the "New World" (the United States, Canada, and Australia):

Accepted Answer

Labor migration from Europe to the United States, Canada, and Australia increased the labor supply in the New World, which tended to decrease the rate of growth of real wages there due to increased competition for jobs. Conversely, this migration decreased the labor supply in the Old World (Europe), which tended to increase the rate of growth of real wages there due to reduced competition for jobs.

Question 20

The immigration of Russian Jews to Israel:

Accepted Answer

The immigration of Russian Jews to Israel increased the population of skilled workers but did not decrease wages. Russian immigrants were highly educated and skilled, which helped to boost Israel's economy. The influx of these workers did not cause wages to decrease because they were filling positions that were previously unfilled or in high demand.

Quiz 5: Movement of Labor and Capital Between Countries