Question

Structural unemployment is sometimes said to result from a mismatch between the job skills that employers want and the job skills that workers have. To explore this idea, consider an economy with two industries: auto manufacturing and aircraft manufacturing. Assume that workers in these two industries require similar amounts of training, and they can choose which industry to train for at the beginning of their careers. True or False: Wages in the auto manufacturing industry would be less than those in the aircraft manufacturing industry.

Answer 1

Answer:

False

Explanation:

Due to the fact that the same amount of training is needed in each of the industries, wages would be the same. If wages were higher in the air craft industry, their would be an excess supply of labour in the airline industry. This would pull the wages in the airline industry down until the same wages are earned in both industries