Why do software engineers earn more than cashiers? Why did wages soar after the Black Death? And why might two people with the same degree end up with very different paychecks? This chapter answers those questions by looking at how markets for labor—and for other inputs like land and machinery—really work. We will see that wages are not just numbers on a paycheck; they are signals shaped by productivity, scarcity, choices, and sometimes by forces that have nothing to do with skill.