Suppose that workers immigrate to Minnesota from Canada. Which of the following correctly describes what would happen in the market for labor in Minnesota?
A) The equilibrium wage would increase, as would the quantity of labor. With more workers, the added output from an extra worker is larger.
B) The equilibrium wage would decrease, as would the quantity of labor. With fewer workers, the added output from an extra worker is smaller.
C) The equilibrium wage would decrease, and the quantity of labor would increase. With more workers, the added output from an extra worker is smaller.
D) The equilibrium wage would decrease, and the quantity of labor would increase. With more workers, the added output from an extra worker is larger.

Question

Quizplus · Accepted Answer

When more workers immigrate, the supply of labor increases, leading to a decrease in the equilibrium wage and an increase in the quantity of labor. The marginal product of labor typically decreases with more workers, not increases.

Suppose That Workers Immigrate to Minnesota from Canada