Consider the following specific factors model. Ireland produces food using labor and land and it produces robots using capital and labor (i. e. labor is the mobile factor and capital and land are the specific factors). Assume that the prices of robots and food do not change.
There has been a large outflow of Irish workers. Assume that the prices of robots and food do not change in Ireland.
(1). How does the immigration outflow affect the labor employments in robots and food, and the outputs of robots and food? Draw a picture to illustrate your answers. Label all the axes and all the curves .
(2) How does the immigration outflow affect RK? Briefly explain your answers.
(3) How does immigration outflow affect the purchasing power of land owners in terms of food? Briefly explain your answers.