The Equilibrium Compensating Wage Differential Between Two Occupations in the Same

question 21

Multiple Choice

The equilibrium compensating wage differential between two occupations in the same city is $10 per hour.Both occupations have equivalent training requirements.Shannon works in the higher-paying occupation and would have been willing to do so even if the compensating differential was $5 per hour.Therefore,

• A)Shannon will migrate to the lower-paying occupation
• B)Shannon must have a greater distaste than the typical worker for the nonmonetary characteristics of her occupation
• C)the equilibrium compensating wage differential is more than enough to prevent Shannon from moving to the other job
• D)the higher-paying occupation cannot have a perfectly competitive labor market
• E)Shannon must have a greater preference than the typical worker for the lower- paying occupation

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