Final answer:
Allowing more highly skilled workers into the U.S. will likely lead to decreased average wages for those employees due to increased supply and competition for jobs. However, other market dynamics could influence this outcome, making long-term wage trends more unpredictable, the correct option is A).
Step-by-step explanation:
If the United States allows a greater quantity of highly skilled workers to enter the country, the average wages of highly skilled employees will likely decrease. The reasoning behind this is fairly straightforward:
- The increase in the supply of highly skilled workers creates more competition for jobs requiring high skills.
- This greater competition can lead to employers offering lower salaries since there are more qualified candidates than there are positions available.
- In economic terms, when the supply of a factor of production, such as labor, increases and the demand remains constant, the price of that factor will typically decrease, where price in this context refers to wages for labor.
Therefore, the answer to the question is a. Average wages will decrease. However, this simplistic view does not take into account potential increases in demand for services, innovations by these workers, or other market dynamics that could counteract downward wage pressure. These factors could make wages become more unpredictable over the long term.