Which of the following examples best illustrates a compensating wage differential?
A)Sara and Tom are each 30 years old.Tom earns more than Sara because he has 8 years of work experience, whereas Sara only has 4.
B)Sara earns more than Tom because she has a bachelor's degree, whereas Tom has an associate's degree.
C)Sara earns more than Tom because Sara is an electrical engineer, whereas Tom is a fast-food worker.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

A compensating wage differential refers to the additional amount of income that a worker requires to accept a less desirable job, such as one with higher risk or less pleasant conditions. None of the options provided illustrate this concept.

Which of the Following Examples Best Illustrates a Compensating Wage