0:00
Hello everyone.
00:01
So according to the given question, labour demand, that is w is equal to 24 minus 0 .1e.
00:17
Low skilled workers is equals to 120 melims, that is e.
00:36
Immigration is equals to 20 million.
00:48
So wage rate.
00:52
Now talking about the first part of the question that says what is the market clearing wage rate? if immigration is not allowed so w is equals to 24 minus 0 .1 e so w is equals to 24 minus 0 .1 multiplied by 120 so on solving this we get 24 minus 12 that is equals to 12 now coming to second part of the question that says what is the market clearing wage with open borders so as we know that total supply of labour is equals to 120 plus 20 that is equals to 140 so w is equal to 24 minus 0 .1 e so it will be 24 minus 0 .1 multiplied by 140 so it will be 24 minus 14 that is equals to 10 coming to third part that says how much is the efficiency gain when the united states opens its borders.
02:19
How much surplus is transferred from domestic workers to domestic firms? so calculation of immigration, that is half multiplied by w0 minus w1, m minus n.
02:49
So it will be half multiplied by $1, $1 ,000, $1 .40, sorry, half multiplied by $12, $10, multiplied by $1 .40, $1 .40.
03:02
Minus 120...