Larry and Mike Are Equally Skilled Construction Workers Employed by the Brown

question 254

Multiple Choice

Larry and Mike are equally skilled construction workers employed by the Brown and Root Company.Larry's job is riskier because he typically works on a scaffold 1,000 feet above ground.Larry's higher wage rate is the result of

• A)economic discrimination.
• B)a compensating differential.
• C)a negative feedback loop.
• D)a higher marginal revenue product.

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Definitions:

Net Pay

The amount of an employee's earnings after all deductions, such as taxes and retirement contributions, have been removed.

FICA Tax

The Federal Insurance Contributions Act (FICA) tax is a payroll tax in the United States that is required from both employers and employees to support Social Security and Medicare programs.

Federal Income Tax

A tax levied by the federal government on an individual's or corporation's annual income.

Withholding Allowance

A provision allowing employees to reduce the amount of income tax withheld from their paycheck, based on their personal allowances and deductions.