Sometimes Wages Are Set Above the Equilibrium Level When

question 462

Multiple Choice

Sometimes wages are set above the equilibrium level when

• A)garbage collectors earn higher wages than secretaries due to compensating differentials.
• B)accountants earn more than dental technicians due to higher educational requirements.
• C)movie superstars earn more than talented plumbers.
• D)unions negotiate higher wages by threatening to strike.

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Definitions:

Fiduciary Duty

The legal obligation of one party to act in the best interest of another when entrusted with care of money or property.

Utmost Good Faith

A legal doctrine requiring all parties to a contract, especially in insurance, to act honestly and disclose all relevant facts.

Business's Reputation

A business's reputation is the public perception or regard for a company, significantly influencing its success by affecting customer trust and loyalty.

Agency-by-Necessity

A situation in which one party (the agent) is empowered to act for another party (the principal) under emergency circumstances, without prior authorization.