In the tables below are the demands for labor and the levels of domestic output that can be produced at each level of employment in two countries.
|
Country X
|
|
|
Real wage rate
|
Quantity of labor demanded
|
Real output
|
|
$12
|
140
|
$1680
|
|
11
|
160
|
1780
|
|
10
|
180
|
1880
|
|
9
|
200
|
1980
|
|
8
|
220
|
2080
|
|
7
|
240
|
2180
|
|
6
|
260
|
2280
|
|
Country Y
|
|
|
Real wage rate
|
Quantity of labor demanded
|
Real output
|
|
$12
|
20
|
$ 240
|
|
11
|
40
|
480
|
|
10
|
60
|
540
|
|
9
|
80
|
880
|
|
8
|
100
|
1000
|
|
7
|
120
|
1100
|
|
6
|
140
|
1180
|
(a) What would the wage rates be if employment was 200 in country X and 140 in country Y?
For country X the wage rate would be 9, and country Y the wage rate would 6
(b) What would total wages paid and business incomes be in each country given employment conditions in (a)?
(c) If 20 workers migrate from country Y to country X, what will happen to wage rates, output, business incomes, and total wages?