If a Firm Has Two Plants, One Located in Desirable

question 130

Multiple Choice

If a firm has two plants, one located in desirable Scenic Springs and the other located in the undesirable Swamp Lands, the workers in Scenic Springs will be paid _______ than the workers in Swamp Land and the difference in wages is referred to as a______ .

• A)more; worker equity payment
• B)less; worker equity payment
• C)less; compensating wage differential
• D)more; compensating wage differential

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Definitions:

Precautionary Principle

A strategy employed in policy and environmental decision making that encourages caution and preventive action in the face of scientific uncertainty.

Coupon Interest Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value, and paid from issue date until maturity.

Issuance Price

The price at which securities, such as stocks or bonds, are sold to the public or investors when they are first offered.

Market Rate

Market rate, or market interest rate, refers to the prevailing rate of interest that borrowers and lenders can expect to transact at, in the wider market.