The basic tools of supply and demand analysis can be used to explain wage differences between skilled and unskilled workers.

Question

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In supply and demand analysis, the availability and demand of a particular skill set can affect wage differences between skilled and unskilled workers. For example, if there is a high demand for workers with a particular skill set and a limited supply of those workers, their wages will be higher than those of workers with less in-demand skills. Additionally, if there is an oversupply of workers with certain skills, their wages may be lower. Therefore, supply and demand analysis can explain the wage differences between skilled and unskilled workers.

The Basic Tools of Supply and Demand Analysis Can Be