Use the following figure to answer the question : Figure 18-3 :
shows the impact of immigration on the labor market of a country.Immigration in shifts the labor supply curve from S to S'.
-Refer to Figure 18-3.The increase in the income of the capital owners in the country,due to immigration,is represented by the area:
A)ABC.
B)wACw'.
C)ABCE.
D)wABw'.

Question

Use the following figure to answer the question : Figure 18-3 : 
shows the impact of immigration on the labor market of a country.Immigration in shifts the labor supply curve from S to S'. 
-Refer to Figure 18-3.The increase in the income of the capital owners in the country,due to immigration,is represented by the area:
A)ABC. 
B)wACw'. 
C)ABCE. 
D)wABw'.

Quizplus · Accepted Answer

The increase in the income of the capital owners is represented by the area wACw', which is the difference between the original equilibrium wage rate (w) and the new equilibrium wage rate (w') after immigration. Area ABC represents the deadweight loss or loss of social welfare due to immigration, while area ABCE represents the gain in total surplus due to immigration.

Use the Following Figure to Answer the Question : Figure