Suppose there are two types of labor, high skilled and low skilled. The demand curve for high skilled labor lies ________ the demand curve for low skilled labor and the supply curve of high skilled labor lies ________ the supply curve of low skilled labor.

Question

Quizplus · Accepted Answer

The demand curve for high skilled labor lies above the demand curve for low skilled labor because high skilled labor is generally more productive and thus more valued by employers. The supply curve for high skilled labor lies above the supply curve for low skilled labor because there are typically fewer high skilled workers available, making them more scarce and thus more expensive.

Suppose There Are Two Types of Labor, High Skilled and Low