All of the following are examples of equilibrium factor- price differentials, EXCEPT:
A) higher pay to a dentist than to a dental hygienist.
B) the wages earned by labour of varying ability.
C) the prices of two pieces of land, one with a good supply of water and one without.
D) the difference in average wages in Toronto and Dryden, Ontario.
E) an income differential that induces increased rates of entry into the higher paid professions.

Question

Quizplus · Accepted Answer

An income differential that induces increased rates of entry into the higher paid professions is not an example of an equilibrium factor-price differential, as it suggests a disequilibrium that will be corrected over time as more people enter the higher-paid profession, reducing the wage differential.

All of the Following Are Examples of Equilibrium Factor- Price