A Compensating Differential Means That

question 5

Multiple Choice

A compensating differential means that:

• A)a wage difference arises from different marginal productivities of labour
• B)workers that do similar work should be paid the same wage
• C)a wage difference arises from non-monetary characteristics of different jobs
• D)all of the above

---

Definitions:

Tax Rate

The rate at which taxes are applied to an individual or a corporation’s income.

Consumption Tax

A tax on the purchase of goods and services, levied at the point of sale.

Income Tax

A tax levied by governments on the income generated by businesses and individuals within their jurisdiction.

Household Spending

The total expenditure by households in an economy on consumption-related items over a certain period.