The wage differences we observe in the economy are, to a large extent, attributable to:
A)inefficient markets
B)equivalent demand for labour across different jobs held by different groups of people
C)the determinants of equilibrium wage
D)constant productivities across different employment groups

Question

Quizplus · Accepted Answer

The determinants of equilibrium wage, such as supply and demand for labor, productivity, and education, training, and experience of the worker, play a significant role in determining wage differences in the economy. Choice A (inefficient markets) is not always the case and does not fully explain wage differences. Choice B (equivalent demand for labor across different jobs held by different groups of people) is incorrect as different jobs have different demand levels, and different groups of people have different qualifications and skills to perform specific jobs. Choice D (constant productivities across different employment groups) is also not correct as different employment groups can have different levels of productivity due to various factors, such as education and experience.

The Wage Differences We Observe in the Economy Are, to a Large