Factor-price differentials might persist in equilibrium because ofO A. compensating differentials where, for example, some jobs are cleaner than others.B. intrinsic differences where, for example, some jobs allow for independence and flexibility.C. intrinsic differences where, for example, the fertility of land can only be increased with costly fertilizers.D. compensating differentials where, for example, engineers must train to acquire adequate skills for employment. It was argued that temporary factor-price differentials tend to be eroded by factormobility. This question requires you to think about this process. Consider the twomarkets for sheet-iron workers and steel-pipe workers in the same region.Suppose both markets are competitive. We begin in a situation in which bothsheet-iron workers and steel-pipe workers earn $20 per hour. Assume thatworkers can switch easily between the two jobs. The supply and demand curvesfor labour in each market are shown to the right.Steel-Pipe WorkersWspSheet-Iron WorkersWsiSsP20.0-20.0-a. Now suppose there is a sharp increase in the demand for sheet iron. Explainwhat happens in the market for sheet-iron workers.DsIDSPO A. There would be a decrease in the use of sheet-iron workers andan increase in sheet-iron worker wages.10001000B. There would be an increase in the use of sheet-iron workers andEmploymentEmploymentan increase in sheet-iron worker wages.O C. There would be an increase in the use of sheet-iron workers anda decrease in sheet-iron worker wages.D. There would be a decrease in the use of sheet-iron workers anda decrease in sheet-iron worker wages.

Factor-price differentials might persist in equilibrium because of A. compensating differentials where, for example, some jobs are cleaner than others. B. intrinsic differences where, for example, some jobs allow for independence and flexibility. C. intrinsic differences where, for example, the fertility of land can only be increased with costly fertilizers. D. compensating differentials where, for example, engineers must train to acquire adequate skills for employment.

Factor-price differentials might persist in equilibrium because of A. compensating differentials where, for example, some jobs are cleaner than others. B. intrinsic differences where, for example, some jobs allow for independence and flexibility. C. intrinsic differences where, for example, the fertility of land can only be increased with costly fertilizers. D. compensating differentials where, for example, engineers must train to acquire adequate skills for employment.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

ChapterST8: Earnings Differences Between Men And Women

Section: Chapter Questions

Problem 2CQ

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