Which of the Following Explains the Vast Differences in Earnings

question 160

Multiple Choice

Which of the following explains the vast differences in earnings in the United States?

• A) ability,effort,and chance
• B) compensating differentials
• C) physical attractiveness
• D) All of the above are correct.

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Definitions:

Monopsonistic Employer

An employer who has significant control over the labor market and is the only or dominant buyer of labor, allowing them to influence wages and employment conditions.

MRP

The marginal revenue product, representing the additional revenue generated from employing one more unit of a factor, such as labor or capital.

Labor Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor workers are willing to offer.

Wage Rate

The fixed amount of compensation paid to an employee by an employer in exchange for work performed, typically expressed per hour, day, or piece produced.