Suppose the following conditions existed in the Canadian labour market:
1)All labour is mobile and possesses the same skills.
2)Non-monetary advantages are the same across industries and occupations.
3)The demand conditions for labour are the same across industries.
In this situation,we expect wage rates to
A)be the same in all industries.
B)be higher in some industries than in others.
C)be the same in most industries.
D)differ because of the desirability of the location of the job.
E)have equilibrium differentials.

Question

Quizplus · Accepted Answer

With all labour being mobile and possessing the same skills, non-monetary advantages being the same, and demand conditions being equal across industries, there would be no reason for wage differentials to exist. Therefore, we would expect wage rates to be the same in all industries.

Suppose the Following Conditions Existed in the Canadian Labour Market