ECON 232 Study Guide - Final Guide: Real Wages

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1 Feb 2016
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Us( new world, but not western europe) is a relatively equal income distribution nation in 19th century. Lower part of skill distribution moves to us. But within this group---relating lower = lower skilled. The impact on sending and receiving labour markets. X-y complement in production demand of young urban men increases if x-y substitute in production. Land-urban men=substitutes, increase return on land in the old world. Unskilled labor- urban men= substitutes: human k decreases decreases ( ) Mpl decreases (= wl/p decreases: emigration=>scale decreases and urban populations decreases(old world economy becomes smaller, ls response=>attracts new entrants. Alabor supply data decides how labor supply curve look like. High-end from equal to unqual: trade response. > demand of other countries for export in the sending countries decreases , export that use urban men intensively. Export expensive: capital follows labor, draw the capital along with labor. International capital markets have elastic capital supply curve ( wk/p doesn"t rise)