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GCE Economics 1989 Question 32

Question 32

Labour Market

Which of the following is the most important reason why wages differ among occupations?

  1. A.Length and cost of training
  2. B.Supply of labour
  3. C.Attractiveness of the job
  4. D.Influence of trade unions
  5. E.Government decision.
Show the answer and explanation

Answer: B (Supply of labour)

Explanation

Wages are set by demand for and supply of labour; jobs with a scarce supply of workers (because of training, risk etc.) pay more.