If Job a and Job B Are Identical in All

question 222

Multiple Choice

If job A and job B are identical in all aspects, except that job B pays higher wages, what will happen over time?

• A) An increase in the demand for workers in job A will cause the wages of job A workers to equal the wages of job B workers.
• B) A decrease in the demand for workers in job B will cause the wages of job B workers to fall to the level of wages in job A.
• C) Job A workers will become job B workers, decreasing the supply of labor to Job A and increasing the supply of labor to job B until wages are equal but lower in job B.
• D) Job A workers will become job B workers, increasing the supply of labor to Job A and decreasing the supply of labor to job B until wages are even higher in job B.

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Definitions:

CAFTA

The Central America Free Trade Agreement, a trade agreement between the United States and Central American countries to reduce trade barriers and increase economic cooperation.

Trade Agreement

A treaty between two or more nations regarding the terms of trade between them, often aiming to reduce tariffs and foster trade.

Central America

A region located in the southernmost part of North America, consisting of seven countries between Mexico to the north and Colombia to the south, known for its diverse geography and cultures.

International Monetary Fund

An international organization that aims to promote global economic stability and growth by providing monetary cooperation and financial assistance to its member countries.