Wages of doctors tend to be higher than wages of bankers. Which of the following is a compensating differential explaining the difference in wages?
A)Doctors have the stress of being responsible for other peoples' lives while bankers do not.
B)Doctors are on call to work nights and weekends, while bankers work traditional business hours.
C)Doctors must pay for malpractice insurance in case they are sued for a mistake on the job.
D)All of the above are compensating differentials.

Question

Quizplus · Accepted Answer

All of the above are compensating differentials that can explain why doctors earn higher wages than bankers. Doctors have higher levels of stress and responsibility, are often required to work non-traditional hours, and must pay for malpractice insurance. These compensating differentials help to offset the costs and risks associated with being a doctor and thus contribute to higher wages in this profession.

Wages of Doctors Tend to Be Higher Than Wages of Bankers