In the short run, as immigration occurs and more labor is employed, what will happen to the marginal products of land and capital (fixed resources) in the destination country?
A) Neither will be affected.
B) Both will rise.
C) Both will fall.
D) The marginal products of land marginal product of land will rise and the marginal product of capital will fall.

Question

Quizplus · Accepted Answer

As more labor is employed due to immigration, the economy experiences an increase in labor supply. This increase in labor supply results in an increase in the marginal products of land and capital. The reason for this is that the fixed resources become more productive when additional labor is used with them. Therefore, both marginal products will rise.

In the Short Run, as Immigration Occurs and More Labor