Because Skills Are Costly to Obtain, at a Given Wage

question 151

Multiple Choice

Because skills are costly to obtain, at a given wage rate, the

• A) quantity demanded of high-skilled labor is less than the quantity demanded of low-skilled labor.
• B) quantity demanded of high-skilled labor is greater than the quantity demanded of low-skilled labor.
• C) quantity supplied of high-skilled labor is less than the quantity supplied of low-skilled labor.
• D) quantity supplied of high-skilled labor is greater than the quantity supplier of low-skilled labor.

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Definitions:

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including lease payments, wage bills, and insurance fees.

Market Price

The existing rate at which an asset or service is offered for buying or selling.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the cost per unit of production.

Fixed Cost

Costs that do not change with the level of output or production, such as rent, salaries, and insurance.