High-skilled workers earn more than low-skilled workers in part because the high-skilled workers have

Question

Quizplus · Accepted Answer

High-skilled workers tend to have a higher value of marginal product, which means that the additional output they produce for a firm is worth more than the additional output created by low-skilled workers. As a result, firms are willing to pay high-skilled workers a higher wage to encourage them to continue working for the company. Better health, greater supply, and fewer deductions are not necessarily factors that contribute to higher wages for high-skilled workers. A lower value of marginal product would result in lower wages.

High-Skilled Workers Earn More Than Low-Skilled Workers in Part Because