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Explain the Reasons Why an Employer May Pay Workers a Wage

question 12

Essay

Explain the reasons why an employer may pay workers a wage above the market clearing rate.


Definitions:

Scarcity

is the fundamental economic problem of having seemingly unlimited human wants in a world with limited resources.

Rationed

The controlled distribution of scarce resources, goods, or services.

Market Setting

Refers to the competitive environment in which businesses operate, influenced by supply and demand dynamics.

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