Factor Markets — Practice Set 2

In competitive labor markets, persistent wage differences mainly reflect:

A compensating differential is:

An effective union that raises wages above equilibrium will tend to:

The 'crowding hypothesis' explains some wage gaps by arguing that:

A firm will invest in human capital (training) for workers when:

The rental price of capital in equilibrium equals:

If the interest rate falls, the present value of future returns ___ and investment ___.

Economic rent on land is:

A minimum wage set above equilibrium in a monopsonistic labor market could:

Superstar effects (huge pay gaps at the top) are best explained by: