The key distinguishing feature between the mainstream economics school and the institutional labor economics (or industrial relations) school is that the industrial relations school believes that labor markets:
A) Are not perfectly efficient.
B) Operate similar to other types of markets.
C) Have too few suppliers of labor (workers) but many purchasers of labor (employers).
D) Work only when there is a "working class" that is excluded from the "ownership class."

Question

Quizplus · Accepted Answer

The institutional labor economics school believes that labor markets are not perfectly efficient, which is the key distinguishing feature from the mainstream economics school, which assumes that markets are always efficient. The industrial relations school also emphasizes the role of institutions, such as unions and minimum wage laws, in shaping labor market outcomes. Options B, C, and D do not accurately reflect the views of the institutional labor economics school.

The Key Distinguishing Feature Between the Mainstream Economics School and the Institutional