Economists suggest that the widening wage gap between unskilled and skilled workers may be caused by what?
Correct answerB. A decrease in the demand for unskilled workers because of advances in technology and increases in international trade
Explanation
Skill-biased technology raises demand for educated workers, while imports from low-wage countries replace unskilled jobs. Both reduce relative demand for unskilled labour and widen the gap.
Correct answerC. Discrimination can only persist in a competitive labour market if customers are willing to pay to maintain the discriminatory practice or the government requires discrimination
Discussion