Increase in Home Labor With an increase in Home labor from

+ ΔL, the origin for the shoe industry shifts from 0_S to

. At point B,

units of labor and

units of capital are used in shoes, whereas 0_CL′ units of labor and 0_CK′ units of capital are used in computers. In the long run, industry outputs adjust so that the capital–labor ratios in each industry at point B (the slopes of

and 0_CB) are unchanged from the initial equilibrium at point A (the slopes of 0_SA and 0_CA). To achieve this outcome, all new labor resulting from immigration is allocated to the shoe industry, and capital and additional labor are transferred from computers to shoes, keeping the capital–labor ratio in both industries unchanged.