Multiple Choice
What is labor market discrimination?
15. Markets for the Factors of Production
Differences in Wages
Multiple Choice
Why might wages differ across occupations?
A
Because occupations differ in required skills, education, productivity, working conditions, and the supply and demand for labor, causing wages to vary.
B
Because wages are essentially equal across occupations in competitive markets, with only temporary differences that quickly disappear.
C
Because governments or unions fix wages for each occupation so wages do not reflect productivity or labor market conditions.
D
Because worker preferences alone determine wages, with workers accepting lower pay for non‑monetary job attributes rather than market differences.
Verified step by step guidance1
Understand that wages are determined by the interaction of supply and demand in the labor market for each occupation.
Recognize that different occupations require different levels of skills and education, which affect a worker's productivity and thus their wage.
Consider how working conditions, such as job risk or unpleasantness, can influence the wage premium needed to attract workers.
Acknowledge that the supply of labor varies across occupations, meaning some jobs have more available workers than others, affecting wage levels.
Combine these factors to see why wages differ across occupations: differences in required skills, education, productivity, working conditions, and labor supply and demand all contribute to wage variation.
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