Which of the Following Is an Example of a Compensating

question 142

Multiple Choice

Which of the following is an example of a compensating differential?

• A)paying workers with more years of experience higher wages than workers with fewer years of experience, all else equal
• B)paying workers who work on the day shift lower wages than workers who work the night shift, all else equal
• C)paying accountants who have passed the Certified Public Accountant exam higher wages than accountants who have not passed it, all else equal
• D)All of the above are examples of compensating differentials.

---

Definitions:

Machine-Hours

A measure of production output or operational time, calculated by the number of hours a machine is run during a specific period.

Markup

A pricing strategy where a seller adds to the cost of the goods to determine the selling price, aimed at ensuring a profit margin above cost.

Selling Prices

The actual amount that a customer pays for a product or service, which can include discounts, promotions, and taxes.

Markup

The amount added to the cost price of goods to cover overhead and profit, determining the selling price of the product.