There are two economies. Economy A is dominated by the self-driving cars, which has the following production function: The production function of the self-driving car industry is:
Y =K^1/2(min{2H,7L})^1/2,
where K represents capital, H represents high-skilled labor, and L represents low- skilled labor.
Economy B is dominated by the agriculture industry, which has the following pro-duction function:
Y =K^1/3 (4H+3L^)2/3,
where as before K represents capital, H represents high-skilled labor, and L repre- sents low-skilled labor.
Suppose an immigration policy in each economy increased the intake of low-skilled immigrants rapidly. In the short run, how would it affect the wage of high-skilled workers in each economy?