There is no question that immigration is an incendiary issue in the U. Economic theory can tell us something about the politics of the immigration...

There is no question that immigration is an incendiary issue in the U.S. Economic theory can tell us something about the politics of the immigration issue. Current levels of immigration are about 900,000 immigrants a year. The simple model in Graph 5.1 can shed some light on the immigration issue. Suppose the economy is competitve with L1 equal to the supply of the native born labor force L2-l1 equal to the immigration labor force.a. What is the impact of immigration, OL1 to OL2 on the equilibrium wage?b. What is the impact on the native born labor force? What is the loss in wage in wage payments to the native born workers? c. What are the payments to immigrants?d. What are the gains to capital, i.e. the owners of business, from immigration? What is the impact of immigration on the producer surplus?e. How do the gains to capital compare with the losses to labor? What does this tell us about the aggregate effects on immigration on the national economy?f. What importation assumption does this simple model make?g. Does this simple model tell you anything about the politics of the immigration debate?