Which of the Following Is a Reason Why the Wage

question 103

Multiple Choice

Which of the following is a reason why the wage rate of high-skilled workers exceeds the wage rate of low-skilled workers?

• A) The market for high-skilled workers is more competitive than the market for low-skilled labor.
• B) The demand for high-skilled workers exceeds the demand for low-skilled workers.
• C) The number of high-skilled workers exceeds the number of low-skilled workers.
• D) Low-skilled workers often are in the process of acquiring more human capital.

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Definitions:

Present Values

The contemporary valuation of a forthcoming sum of money or cash flows, based on a given rate of return.

Cash Inflows

Money entering a business from various sources, including sales, financing, and investment income.

Cash Outflows

Expenditures or payments made by a business, leading to a decrease in cash assets, including operational costs, investments, and financing activities.

IRR

Internal Rate of Return; a financial metric used to estimate the profitability of potential investments, calculated as the rate of return that sets the net present value of all cash flows from a particular project equal to zero.