Jake and Zach Are Identical Twins Who Attended Grammar School

question 90

Multiple Choice

Jake and Zach are identical twins who attended grammar school through college together. Jake took a job as an engineer who does not have to travel out of the state. Zach took a job as an engineer who must travel out of state once a week. Jake earns $125,000 a year, and Zach earns $155,000 a year. Select the best explanation for this wage difference.

• A)Zach puts in less effort than Jake.
• B)Zach has less human capital than Jake.
• C)Zach receives a higher wage to compensate for the disagreeable nature of business travel.
• D)Jake's lower salary supports the signaling theory of education.

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Definitions:

Liquidation

The process of winding up a company's financial affairs by selling off its assets to pay creditors and distribute any remaining assets to the shareholders.

Liabilities

Financial obligations or debts owed by a business or individual to creditors.

Personally Insolvent

A state in which an individual cannot meet their debt obligations with their available financial resources, potentially leading to bankruptcy.