Which factor is most likely to cause the wage rate in a particular occupation to rise?

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Question

Which factor is most likely to cause the wage rate in a particular occupation to rise?

Accepted Answer

An increase in the demand for the good produced by that occupation — An increase in demand for the good produced raises the derived demand for labour in that occupation, shifting the demand for labour curve to the right and pushing wages up. Option A would increase labour supply, lowering wages. Option B reduces productivity, which lowers the demand for that labour. Option D makes it easier to enter the occupation, increasing labour supply and reducing wages.

Answer

A reduction in the barriers to entry to that occupation

Answer

A fall in the productivity of workers in that occupation

Answer

An increase in the supply of labour in that occupation

Answer

An increase in the demand for the good produced by that occupation

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