Scenario: There Are Two Regional Labor Markets in a Country

question 219

Multiple Choice

Scenario: There are two regional labor markets in a country, X and Y. Workers are equally qualified to perform the same type of job in either region. The labor demand in both markets is identical.
-Refer to the scenario above.If in equilibrium the wage in X is greater than the wage in Y,what can explain this wage difference?

• A) Differences in human capital
• B) Differences in compensating wages
• C) Taste-based discrimination
• D) Statistical discrimination

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Definitions:

Direct Materials

The raw materials that are directly traceable to the manufacturing of a product.

Organizational Objectives

The specific, measurable goals set by a business or organization to guide operations and strategic planning.

Planning

The process of setting objectives, determining strategies to achieve those objectives, and developing plans to integrate and coordinate activities.

Conversion Costs

The combined total of direct labor and manufacturing overhead costs that are incurred to convert raw materials into finished products.