Suppose that Rosa is considering migration to another country. To move, she will have to spend $5,000 on transportation and $4,000 in application and other processing fees. Rosa's stream of future earnings in her home country is $500,000. She expects to earn a stream of future earnings of $800,000 in another country. Based on this information, Rosa will decide to migrate as long as the implicit costs of leaving her friends and family and adjusting to a new culture are

Question

Quizplus · Accepted Answer

The total explicit costs of moving are $5,000 (transportation) + $4,000 (application and other processing fees) = $9,000. The difference in future earnings between the two countries is $800,000 - $500,000 = $300,000. Therefore, for migration to be beneficial, the implicit costs must be less than the net gain after subtracting explicit costs: $300,000 - $9,000 = $291,000.

Suppose That Rosa Is Considering Migration to Another Country