There Are Big Differences in Compensation Amounts and Types Across

question 3

Multiple Choice

There are big differences in compensation amounts and types across borders. Which of the following examples represent the importance of these differences?

• A) There are many nations where workers earn just a fraction of the wages typically offered in the United States
• B) There are no nations where workers earn more than the wages typically offered in the United States
• C) Wage differentials can only be used to explain why manufacturing jobs are being outsourced
• D) All of the above

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Definitions:

Clams

Marine bivalve mollusks known for their edible soft bodies enclosed within a hard shell.

Government Imposes

Refers to regulations, taxes, or policies that a governmental body enforces on individuals or organizations.

Price Ceiling

A government-imposed limit on how high the price of a product can be charged in the market, usually intended to protect consumers from high prices.

Market-Clearing Price

The price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the equilibrium price.