Lee Earns More Than Does Pat

question 325

Multiple Choice

Lee earns more than does Pat. Which of the following can explain why?

• A) Pat is discriminated against.
• B) Lee has more human capital.
• C) Lee has a greater degree of specialization in earning an income.
• D) All of the above could be a factor leading to the wage difference.

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Definitions:

Availability Delay

The lag between the deposit of a check and the moment the funds become available in the account.

Securities Trade

The buying and selling of financial instruments such as stocks, bonds, and mutual funds.

Fixed Cost

Costs that do not vary with the volume of output or sales, such as rent, salaries, and insurance premiums.

Target Cash Balance

The optimal amount of cash that a company aims to maintain to handle its operational and transactional needs.