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Explain the main causes of differences in incomes in a modern economy.
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Explain the main causes of differences in incomes in a modern economy. Demand of Labour To understand why some jobs are paying more than others we need to look in deep at the markets for the services they provide, thus figuring out what supply and demand there is for that type of labour. Demand for the labour will normally have a certain correlation with demand for the product the firm is producing. And the wage will normally depend on the supply and demand for labour. So labour markets like all the other markets in the economy are governed by the forces of the supply and demand (The less labour supply there is, the more firms are willing to pay to get that labour, and vice-versa.). But labour markets instead of being final goods ready to be enjoyed by the consumer are inputs into the production of other goods. But demand on labour also depends on...
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