In the specific-factors model, migration of labor will cause the wage to:
A) rise in the receiving country and the wage to fall in the sending country.
B) fall in the receiving country and the wage to rise in the sending country.
C) rise in both the receiving and sending countries.
D) fall in both the receiving and sending countries.

Question

Quizplus · Accepted Answer

In the specific-factors model, when labor migrates to another country, the supply of labor in the receiving country increases, leading to a decrease in wages there due to the increased competition for jobs. Conversely, the sending country experiences a decrease in labor supply, leading to an increase in wages due to the reduced competition for jobs.

In the Specific-Factors Model, Migration of Labor Will Cause the Wage