Your report should address the following questions:
1. Using a simple specific-factors model, illustrate how immigrants affect wages of native-born workers. Assume native-born workers aresubstitutes for native-born workers). [14 marks]
a) Clearly specify the assumptions in your specific-factors model.
b) Draw a diagram to present a graphic analysis of the model.
c) Explain how the wages of native-born workers change with an inflow of immigrants.
2. Repeat the steps b) and c) in Question 1 above. Now assume native-born workers are identical; immigrants are complements for native-born workers. [10 marks]
3. In real world, did wages of native-born workers change as predicted by your models above? Answer this question by drawing on existing economic studies of the US, EU, and Australia, respectively. [10 marks]
4. What immigration policies would you recommend to the Australian government? [6 marks]
Finally, your report should be structured in a proper format: Abstract, Introduction, Sub-sections, Conclusions, References. [10 marks]