Suppose that experienced oil- field workers are observed to earn a higher wage in Alberta than in Newfoundland.Economists would likely call this
A)an intrinsic difference.
B)an equilibrium differential.
C)a temporary factor- price differential.
D)an acquired difference.
E)equalization of net advantage.

Question

Quizplus · Accepted Answer

A temporary factor-price differential refers to a situation where wages are higher in one region due to temporary factors such as a shortage of skilled workers or higher demand for labor. In this case, the higher wages for experienced oil-field workers in Alberta may be due to temporary factors such as a boom in the oil industry or a shortage of experienced workers in the region. It is not an intrinsic or acquired difference, as it is not based on inherent characteristics of the workers themselves, nor is it an equilibrium differential that would arise from differences in labor supply and demand in the two regions. It is also not equalization of net advantage, which refers to a situation where wages in different regions eventually equalize due to workers migrating to the region with higher wages.

Suppose That Experienced Oil- Field Workers Are Observed to Earn