Figure 19-1 -Refer to Figure 19-1.Suppose the Local Labor Market Was in Labor

question 342

Multiple Choice

Figure 19-1

-Refer to Figure 19-1.Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $10 as shown.Which of the following compensation schemes could the graph be illustrating?

• A) An efficiency wage.
• B) Discrimination.
• C) A compensating differential.
• D) The superstar phenomenon.

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