Asked by Ethan Berumen on May 09, 2024
Verified
If the elasticity of demand for labor in the United States is unitary, immigration into the United States can be expected to
A) increase the average U.S. wage rate.
B) decrease the total amount of wage earnings that U.S. workers receive.
C) increase the total amount of wage earnings that U.S. workers receive.
D) leave the total amount of wage earnings that U.S. workers receive unchanged.
Elasticity of Demand
A measure of how much the quantity demanded of a good responds to a change in the price of that good, with all other factors being held constant.
Immigration
The act of moving to a new country or region with the intention of settling there.
Wage Earnings
Income received by an individual in return for labor or services performed, usually calculated on an hourly, daily, or piecework basis.
- Assess the ramifications of migration on labor market evolutions and wage discrepancies.
Verified Answer
KS
Khamryn Simon-McdonaldMay 13, 2024
Final Answer :
D
Explanation :
When the elasticity of demand for labor is unitary, it means that the percentage change in the quantity of labor demanded is equal to the percentage change in the wage rate. Therefore, if immigration increases the labor supply, the total wage bill (total amount of wage earnings) remains unchanged because the proportional increase in labor supply is exactly offset by a proportional decrease in the wage rate, leaving the total wage earnings the same.
Learning Objectives
- Assess the ramifications of migration on labor market evolutions and wage discrepancies.