A Compensating Wage Differential Is a Wage Difference That

question 52

Multiple Choice

A compensating wage differential is a wage difference that

• A)results from a monopsony.
• B)is attributable to different demands for labor.
• C)makes up for the high risks or poor working conditions of a job.
• D)leads to more risks taken on the job.
• E)results from discrimination.

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Definitions:

Productivity

A measure of the efficiency of production, often calculated as the ratio of outputs produced to inputs used in the production process.

Capital

Financial assets or the financial value of assets, such as cash and goods, used to generate wealth through investment.

Labor

Labor refers to the human effort, both physical and mental, used to produce goods and services.

Close Substitutes

Goods or services that can be used in place of each other with relative ease by consumers, based on similar features, functions, or effects.