Example 2.2 in the textbook explains the source of wage inequality in the United States. In terms of supply and demand, the wage of skilled workers has:
A) decreased, because the supply has increased more than the increase in demand for those workers.
B) decreased, because the demand has decreased and the supply has increased.
C) increased, because the demand has increased faster than the increase in supply.
D) increased, because the demand has increased, while the supply has decreased.

Question

Quizplus · Accepted Answer

According to the textbook, the source of wage inequality in the United States is due to the demand for skilled workers increasing faster than the increase in supply. This means that the wage for skilled workers has increased.

Example 22 in the Textbook Explains the Source of Wage Inequality