FIGURE 14- 1 Suppose an island economy has only two labour markets - fishing (high skill)and farming (low skill).There are 1000 males and 1000 females in the labour force.There is an equal distribution of skilled and non- skilled workers among each sex.

-Refer to Figure 14- 1.The two labour markets are each in a equilibrium at point E.The wage differential between the industries is a(n)wage differential.

Question

FIGURE 14- 1 Suppose an island economy has only two labour markets - fishing (high skill)and farming (low skill).There are 1000 males and 1000 females in the labour force.There is an equal distribution of skilled and non- skilled workers among each sex.
 
-Refer to Figure 14- 1.The two labour markets are each in a equilibrium at point E.The wage differential between the industries is a(n)wage differential.

Quizplus · Accepted Answer

The equilibrium in each labour market indicates that the wages in each market are competitive and reflect the supply and demand forces in each market. Therefore, the wage differential between the industries is a competitive wage differential.

FIGURE 14- 1 Suppose an Island Economy Has Only Two