John and Mark Hold Equivalent Secretarial Jobs,but John,who Makes 20

question 20

Multiple Choice

John and Mark hold equivalent secretarial jobs,but John,who makes 20 percent more than Mark,is employed by a manufacturing firm while Mark is employed by a department store.Based on this information,which of the following best explains this pay differential?

• A)interindustry wage differentials
• B)differences in human capital intensity
• C)merit exception of the Equal Pay Act of 1963
• D)John's stronger negotiation skills

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Definitions:

Opportunity Cost

The cost of missing out on potential benefits from other alternatives when making a choice.

Forgone Current Income

The income an individual or entity could have earned but chose to forego for pursuing an alternative.

State Universities

Public institutions of higher education that are primarily funded by a state or local government.

Opportunity Cost

The result of losing potential upsides from other choices by committing to one.