Multiple Choice
Which factor of production is most commonly cited as the primary reason for differences in living standards across countries?
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0. Basic Principles of Economics
Factors of Production
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Which of the following is NOT one of the four principal determinants of wages?
A
The supply of labor
B
The demand for labor
C
The level of consumer preferences
D
The productivity of labor
Verified step by step guidance1
Step 1: Understand that the four principal determinants of wages in microeconomics typically include factors that directly affect labor supply and demand, as well as productivity.
Step 2: Identify the common determinants of wages: (1) The supply of labor, which reflects how many workers are willing to work at different wage levels; (2) The demand for labor, which depends on how many workers employers want to hire at different wages; (3) The productivity of labor, which influences how much output a worker can produce and thus their value to employers.
Step 3: Recognize that 'The level of consumer preferences' relates more to consumer demand for goods and services rather than directly influencing wages, so it is not considered a principal determinant of wages.
Step 4: Compare each option to the standard determinants and confirm that 'The level of consumer preferences' does not fit as a direct determinant of wages.
Step 5: Conclude that the correct answer is the option that is NOT a principal determinant of wages, which is 'The level of consumer preferences.'
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