Which of the Following Is a Compensating Differential

question 296

Multiple Choice

Which of the following is a compensating differential?

• A) Tiger Woods gets paid more than a college professor.
• B) A window washer working in a suburban residential subdivision gets paid less than one who is washing windows on the outside of a skyscraper.
• C) A nuclear scientist gets paid more than a janitor working in the same building.
• D) On average, White men get paid more than women of all ethnicities.

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Definitions:

Long-Run Market Adjustments

Changes that firms or entire industries undergo over an extended period in response to shifts in demand, technology, and competitive landscapes.

Representative Firm

A theoretical concept or model used to represent the average or typical firm within an industry, often for analytical purposes.

Decrease in Demand

A downward shift in the demand curve, indicating that consumers now want to purchase less of a good at all price levels.

Purely Competitive Industry

An industry characterized by numerous small firms producing identical products where no single firm can influence market price.