Other things the same, we'd expect that a job with less pleasant working conditions pays
A)more; this is known as an efficiency wage.
B)more; this is known as a compensating differential.
C)less; this is known as an efficiency wage.
D)less; this is known as a compensating differential.

Question

Quizplus · Accepted Answer

Jobs with less pleasant working conditions often pay more to compensate for the undesirable aspects of the job. This is known as a compensating differential, not an efficiency wage. Efficiency wages are higher wages paid to increase worker productivity.

Other Things the Same, We'd Expect That a Job with Less