Consider a country that is in autarky. X is the labour intensive good and Y is the capital intensive good. Draw a hypothetical production possibilities frontier (PPF). Suppose the country experiences immigration. Show the effect of more labour on the economy using PPF as well as production functions in K-L space.
That is, show what would happen to prices, wage-rental ratio, production and capital intensity of the goods.
Tip: Labour is more important to labour intensive goods than capital intensive goods.