The Demand Curve for High-Skilled Labor Lies to the Right

question 177

Multiple Choice

The demand curve for high-skilled labor lies to the right of the demand curve for low-skilled labor because

• A) there are more high-skilled workers than low-skilled workers.
• B) high-skilled workers require more compensation to convince them to work than do low-skilled workers.
• C) high-skilled labor is more productive than low-skilled labor.
• D) firms need not be concerned with the minimum wage in the market for high-skilled labor.

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Definitions:

Aggregate Supply

The total supply of goods and services produced within an economy at a given overall price level and in a given time period.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, often used as a measure of inflation.

Expected Price Level

The anticipated average level of prices in the economy for goods and services, as predicted by consumers and businesses.

Actual Price Level

The current market price of goods and services, reflecting the buying power of money at a given time.