If Unskilled Labour Is Relatively Plentiful and Cheap in Many

question 146

Multiple Choice

If unskilled labour is relatively plentiful and cheap in many foreign countries,then as Canada expands its trade with these foreign countries,what happens to the domestic demand for unskilled and skilled labour

• A)The domestic demand for unskilled labour will rise and demand for skilled labour will fall.
• B)The domestic demand for skilled labour will rise and demand for unskilled labour will fall.
• C)The domestic demand for both skilled and unskilled labour will rise proportionately.
• D)The domestic demand for both skilled and unskilled labour will be unaffected, assuming there are no barriers to free trade.

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Definitions:

Equilibrium

A state in a market where supply equals demand, with no external forces causing disruption, hence prices tend to stabilize.

Labor Supply

The cumulative hours that workforce members are eager and able to dedicate to work, provided a set wage.

Marginal Productivity

The additional output resulting from the use of one more unit of a production factor.

Wages

Payments made to labor for their services, typically expressed per hour or per annum.