Which of the following is an example of a compensating differential?
A)Two workers with different undergraduate majors earn different salaries.
B)Two workers with different years of experience earn different salaries.
C)Two workers whose jobs entail different risks earn different salaries.
D)Two workers with different levels of personal attractiveness earn different salaries.

Question

Quizplus · Accepted Answer

Compensating differentials refer to the differences in wages that compensate workers for the non-monetary attributes of a job, such as risks or discomfort. Therefore, option C - where the two workers have jobs that entail different risks - is an example of a compensating differential. The other options do not involve compensating differentials.

Which of the Following Is an Example of a Compensating