Wage Differentials

• What are some key factors that contribute to wage differentials?

  Skill level, demand, supply
• How does human capital affect wage differentials?

  Increases productivity, higher wages
• Market structure and competition have no impact on wage differentials.

  False
• Wage differentials should be differentiated from wage differences
• What are two examples of factors that contribute to wage differentials?

  Skill level and working conditions
• Order the factors that contribute to wage differentials from most to least direct impact:

  1️⃣ Demand and Supply

  2️⃣ Skill Level

  3️⃣ Working Conditions

  4️⃣ Bargaining Power
• Why do jobs requiring higher skills lead to higher pay?

  More education and training
• What happens to wages when demand for a job is high and supply of workers is low?

  Wages increase
• Market demand is a key driver of wage differentials.


  True
• Jobs with high demand and low supply of workers result in higher wages
• Wage differentials refer to the differences in wages or earnings between different jobs, skills, or industries
• Supply and demand play a significant role in determining wage differentials.


  True
• The significance of job characteristics in wage differentials includes factors such as riskier or unpleasant conditions
• What role do unions and collective bargaining play in wage differentials?

  Increase bargaining power
• Match the factor with its explanation in wage differentials:

  Skill Level ↔️ Jobs requiring higher skills pay more

  Demand and Supply ↔️ High demand, low supply increases wages
• Jobs requiring education and training tend to pay higher wages.

  True
• High demand for a job and low supply of workers leads to higher wages
• Riskier jobs always offer lower wages due to high supply of workers willing to take them.

  False
• Higher levels of human capital enhance worker productivity
• What type of jobs tend to pay more due to their required education and training?

  High-skilled jobs
• Supply and demand have no impact on wage differentials.

  False
• Human capital includes skills, knowledge, and experience
• Employers value skilled workers for their increased efficiency
• Match the job characteristic with its influence on wages:

  Skill Level ↔️ Higher skills lead to higher pay

  Working Conditions ↔️ Riskier conditions may command higher pay

  Risk ↔️ High-risk jobs often offer higher wages

  Demand ↔️ High demand drives up wages
• Job characteristics reflect the effort and responsibilities associated with each job.


  True
• Match the market structure with its characteristics:

  Perfect Competition ↔️ Uniform wages, high competition

  Oligopoly ↔️ Higher wages, moderate competition

  Monopoly ↔️ Lower wages, low competition
• Wage differentials refer to the differences in wages or earnings between different jobs, skills, or industries
• Jobs with riskier working conditions often pay higher wages as compensation
• Jobs requiring higher education or training fall under the factor of skill level.
• High demand for a job and low supply of workers lead to higher wages.


  True
• Higher human capital leads to increased worker productivity and higher wages.


  True
• Low human capital results in low productivity and low wages.


  True
• Human capital includes skills, knowledge, and experience.


  True
• High-risk jobs often command higher wages.


  True
• In an oligopoly, wages are typically higher compared to perfect competition.
• Match the effect of unions with its impact on wage differentials:

  Increased Bargaining Power ↔️ Reduces wage gaps between unionized and non-unionized workers

  Standardized Wage Rates ↔️ Decreases wage disparity across industries
• Pay equity legislation aims to reduce gender and race-based wage disparities.


  True
• Limited opportunities for lower-skilled workers to develop skills is known as a lack of social mobility.
• What are monopolistic practices used by dominant firms to suppress wages?

  Market power
• Strengthening anti-discrimination laws is a potential solution to address unfair wage differentials