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Question

Assume the labor demand for unskilled workers in a city in Texas is given by LD = 80 − 2W. The labor

supply curve of natives (i.e., non-immigrants) is given by LS = −20 + 8W, where W is the hourly wage.

  1. Calculate the equilibrium level of employment and wage rate if there are no immigrants.
  2. Suppose the arrival of Mexican immigrants shifts out the labor supply curve to LS = −5 + 8W. Calculate the new equilibrium level of employment and wage rate.
  3. What has happened to the employment level of natives as a result of the immigrant arrival? What has happened to the unemployment rate of unskilled native workers?

Once again – this was flagged for missing information. All of the provided info is there, exactly as the professor provided it to the class for extra practice. I know the answers, just need to know what steps are taken to arrive at the answers.

1) L* = 60 and W* = $10

2) L* = 63 and W* = $ 8.50

3) Native employment fell by 12 workers. The unemployment rate for unskilled workers both before and after immigration is zero since the labor market is in equilibrium.

 
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