Two Workers Are Employed in the Same Job by the Same

question 30

Multiple Choice

Two workers are employed in the same job by the same firm; however, they are paid different wage rates. This could be explained by differences in

• A) the income effect
• B) the price of the firm's output
• C) their marginal products due to differences in ability
• D) working conditions
• E) risk

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Definitions:

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the current market price of a stock by its earnings per share (EPS).

Earnings Per Share

A financial ratio that measures the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability on a per-share basis.

Dividends Per Share

The amount of declared dividends for every share of common stock, indicating the dividend payout to shareholders.

Return On

generally starts a financial metric indicating the efficiency of an investment or comparing the efficiency of several investments, measuring profit in relation to capital invested.