Empirical estimates of cross-wage elasticities show that
A) well-educated labor is more likely to be complementary with capital than is unskilled labor.
B) the extent of substitution in production between immigrant and native workers is very high.
C) labor and energy are complements in production.
D) labor and raw materials are complements in production.

Question

Quizplus · Accepted Answer

Empirical estimates have shown that the cross-wage elasticity for well-educated labor tends to be higher than that for unskilled labor, indicating that well-educated labor is more likely to be complementary with capital than is unskilled labor. This suggests that the two factors of production (skilled labor and capital) are more likely to be used together.

Empirical Estimates of Cross-Wage Elasticities Show That