On average, electricians who work on dangerous high-voltage power lines earn more per hour than similarly skilled electricians who don't work on dangerous high-voltage power lines. The difference in pay is attributed to
A)the marginal product of labor.
B)the marginal product of capital.
C)diminishing marginal returns.
D)a compensating differential.

Question

Quizplus · Accepted Answer

The difference in pay is attributed to a compensating differential. Electricians who work on dangerous high-voltage power lines face a greater risk of injury or death compared to electricians who don't work on such power lines. To compensate for the increased risk, electricians who work on dangerous high-voltage power lines are paid more per hour. This is an example of a compensating differential.

On Average, Electricians Who Work on Dangerous High-Voltage Power Lines