Hypotheses Described in the Text, and That Have Been Proposed

question 181

Multiple Choice

Hypotheses described in the text, and that have been proposed to explain the rising wage gap between skilled and unskilled workers:

• A)may be reasonable explanations for a country whose technology and participation in world markets have remained constant over the relevant time period
• B)may be complementary to one another
• C)must be mutually exclusive
• D)are, in fact, the only possible explanations for the observed wage gap

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Definitions:

Demand

Demand refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a given time period.

Inverse Demand Curve

A representation of the demand for a good showing the maximum price consumers are willing to pay for a given quantity.

Perfect Price Discrimination

Perfect price discrimination occurs when a seller charges each buyer their maximum willingness to pay, extracting all consumer surplus.

Total Profits

The sum of earnings from a business operation, after all expenses have been deducted from total revenue.