Which of the Following Explains the "Beauty Premium" Differences in Wages

question 483

Multiple Choice

Which of the following explains the "beauty premium" differences in wages?

• A)People who spend time on their personal appearance may send a signal that they are more productive workers.
• B)Personal appearance and intelligence are inversely related.
• C)The "superstar phenomenon" explains the "beauty premium."
• D)Better-looking people are more efficient; thus, they are paid an efficiency wage.

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Definitions:

Marginal Cost

The incremental cost of fabricating one more unit of a product or service.

Profit-maximizing Quantity

The point of production where a company reaches its maximum profit, occurring when marginal revenue is equal to marginal cost.

Profit-maximizing Price

The price at which a firm can achieve the highest possible profit.

Total Cost

Refers to the complete cost of production that includes both fixed and variable costs.