1. Suppose the low-skilled workers in rural and urban areas earn the same wage rate. While the...

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1. Suppose the low-skilled workers in rural and urban areas earn the same wage rate. While the cost of acquiring skill is the same in both areas, the increase in the value of marginal product by acquiring skill is higher in urban areas than in rural areas. Draw a graph to illustrate the equilibrium wage rates of low-skilled and high-skilled workers in both rural and urban areas. How does your graph show the difference in income gaps between low-skilled and high-skilled workers in both areas?

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Foundations Of Microeconomics

ISBN: 9780063076280

7th Global Edition

Authors: Bade, Robin;Parkin, Michael

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