Asked by Ankush Aggarwal on May 10, 2024
Verified
If all workers are homogeneous,all jobs are equally attractive to workers,and labor markets are perfectly competitive:
A) compensating differences would cause wage differentials.
B) noncompeting groups of workers would result in wage differentials.
C) all workers would receive the same wage rate.
D) worker mobility would occur such that wage differentials would widen.
Perfectly Competitive
A market structure where there are many sellers and buyers, products are homogeneous, and there are no barriers to entry or exit.
Compensating Differences
Differences in the wages received by workers in different jobs to compensate for the nonmonetary differences between the jobs.
- Understand the relationship between wage differentials and factors such as human capital, job characteristics, and labor market competitiveness.
Verified Answer
PP
Phileene PeagchMay 12, 2024
Final Answer :
C
Explanation :
In a perfectly competitive labor market, all workers are considered homogenous, and all jobs are equally attractive to workers. Therefore, there would be no compensating differences as workers would be willing to work for the same wage rate. Additionally, noncompeting groups of workers would not exist either. Worker mobility would also not lead to increasing wage differentials as all jobs are considered equally attractive. Thus, all workers would receive the same wage rate.
Learning Objectives
- Understand the relationship between wage differentials and factors such as human capital, job characteristics, and labor market competitiveness.
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