Suppose that a company hires recent college graduates for two types of jobs, sales people and credit analysts. The hours worked and skill levels are the same for both positions. The sales people get to travel to several desirable locations, whereas the credit analysts do not leave the home office. When comparing the salaries of the two positions, it is likely that the company pays the
A)sales people less as a compensating differential.
B)credit analysts less as a compensating differential.
C)same salary for both positions because they require the same skill level.
D)same salary for both positions because it would be illegal to do otherwise.

Question

Quizplus · Accepted Answer

Sales people might be paid less as a compensating differential because the opportunity to travel to desirable locations can be seen as a form of non-monetary compensation that makes up for the lower salary.

Suppose That a Company Hires Recent College Graduates for Two