In Determining Wages, Ability, Effort, and Chance

question 178

Multiple Choice

In determining wages, ability, effort, and chance

• A)probably play no role whatsoever.
• B)play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure.
• C)play a role, and that role is fully captured in easy-to-measure factors such as human capital and age.
• D)play a role, and it is fully explained within the context of compensating differentials.

---

Definitions:

Purchased Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets at the acquisition date.

Market Value

The existing rate at which an asset or service is offered for buy or sell within the marketplace.

Amortize Intangible Assets

The process of systematically reducing the recorded cost of intangible assets over their useful life or legal life, whichever is shorter.

Useful Lives

The estimated time period that an asset is expected to be used by a business, contributing to its revenue generation.