Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. Refer to Scenario 18-5. In the labor market in the northern United States, the equilibrium wage a. and the equilibrium quantity of labor will rise. b. and the equilibrium quantity of labor will fall. c. will rise, and the equilibrium quantity of labor will fall. d. will fall, and the equilibrium quantity of labor will rise.

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Business

James Andersen

1 September, 16:10

Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. Refer to Scenario 18-5. In the labor market in the northern United States, the equilibrium wage a. and the equilibrium quantity of labor will rise. b. and the equilibrium quantity of labor will fall. c. will rise, and the equilibrium quantity of labor will fall. d. will fall, and the equilibrium quantity of labor will rise.

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Emmanuel Rowe · Answer 1

c. The equilibrium wage will rise, and the equilibrium quantity of labor will fall

Explanation:

Because of the emigration of workers from the Northern Minnesota to Southern Canada, the equilibrium wage rates will rise and quantity of labor will fall.

This happens because the workers that left have already created a vacuum that will be eager to be filled by their employers who will be willing to increase wages for incoming workers to serve two purposes:

1. To entice them to work for the company and fill the vacuum

2. To try to make sure they stay and not leave another vacuum.

The reason the quantity of labour will fall is because of that vacuum created by the departed workers. It's this drop in labor that will make the equilibrium wages to increase.