Two Workers Are Employed in the Same Job by the Same

question 30

Multiple Choice

Two workers are employed in the same job by the same firm; however, they are paid different wage rates. This could be explained by differences in

• A) the income effect
• B) the price of the firm's output
• C) their marginal products due to differences in ability
• D) working conditions
• E) risk

---

Definitions:

Marginal Costs

refers to the cost associated with producing each additional unit of a product or service.

Average Total Cost

The total cost of production divided by the quantity produced, representing the per-unit cost of production, including both fixed and variable costs.

Diminishing Marginal Returns

A principle stating that as more of a variable input is added to a fixed input, beyond some point, the additional output produced from the additional input will eventually start to decrease.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good changes as production volume changes.