Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?
A) movement of labor from lower-wage to higher-wage jobs
B) readily available information about job opportunities and pay
C) principal-agent problems
D) discrimination

Question

Quizplus · Accepted Answer

Discrimination can result in persistent wage differentials within an occupation, as certain groups may be paid less due to their race, gender, or other characteristics. This is a market imperfection because it distorts the labor market and prevents wages from being set solely based on productivity and skills. Choices A and B are not market imperfections but rather reflect the normal workings of the labor market, while choice C refers to a potential problem within a firm rather than the labor market as a whole.

Which of the Following Is a Market Imperfection That Might