Cory has just graduated from veterinary school. He can earn $40,000 working at a small animal clinic or $50,000 working with farm animals and horses where the risks of getting injured by an animal are higher. The higher salary to work with larger animals is an example of
A)a compensating differential.
B)signaling theory.
C)an efficiency wage.
D)efficient union bargaining.

Question

Quizplus · Accepted Answer

The higher salary for working with farm animals and horses reflects a compensating differential, as the job carries a higher risk of injury.

Cory Has Just Graduated from Veterinary School