Scenario: There Are Two Regional Labor Markets in a Country

Multiple Choice

Scenario: There are two regional labor markets in a country, X and Y. Workers are equally qualified to perform the same type of job in either region. The labor demand in both markets is identical.
-Refer to the scenario above.Let the cost of living be the same in the two regions,and suppose that workers have no non-monetary preferences with respect to the region in which they work and live.If the current wage in market X is larger than in market Y,how do you expect the markets to react?

A) No change will occur because of the differences in compensating wages.
B) Labor supply should increase in market X and decrease in market Y.
C) Labor demand should increase in market X and decrease in market Y.
D) D Labor demand should decrease in market X and increase in market Y.