Which of the Following Comparisons Best Illustrates a Compensating Differential

question 37

Multiple Choice

Which of the following comparisons best illustrates a compensating differential?

• A) John's wage is higher than Jane's because the value of John's marginal product is higher than Jane's.
• B) Beth's wage is higher than Bill's because Beth is very personable, and Bill is very gruff.
• C) Karl's wage is higher than Kay's because Karl's job may cause long-term health problems, and Kay's job will not impair her health.
• D) All of the above are good illustrations of compensating differentials.

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