1 Part

Question:

Consider an economy with two sectors: manufacturing and agriculture. Manufacturing requires labour and capital; agriculture requires labour and land. Note that capital can only be used in manufacturing and land can only be used in agriculture. Labour can be freely mobile across two sectors. Labour is the same across sectors and countries. Now the government is considering passing a law that will allow immigration into the country.

Explain who will support this law and why. [Your response should primarily focus on applying the relevant theory/concept from the course. ]