Question 1

Workers who work the night shift are often paid more than those who do identical work on the day shift.This is referred to as a

Accepted Answer

The practice of paying workers on the night shift more than those on the day shift is an example of a compensating differential. This is because working at night can be more difficult or undesirable for some people, and so employers offer higher wages to attract workers to those shifts. It is not a discriminatory wage practice, as the higher pay is not based on any characteristics of the workers themselves. It is also not wage inequity, as both day and night shift workers are being paid for the same work. Finally, it is not a market inefficiency, as the higher pay is a result of market forces balancing supply and demand for workers on different shifts.

Question 2

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 must "cold call," which many people find to be unpleasant.When comparing the salaries of the two positions,it is likely that the company pays the

Accepted Answer

The answer of Suppose that a company hires recent college...

Question 3

The statement that "night shift workers make a higher wage than day shift workers" is likely to reflect the fact that

Accepted Answer

The answer of The statement that "night shift workers make...

Question 4

The statement that "coal miners are paid more than workers with similar levels of education" is likely to reflect the fact that

Accepted Answer

Coal mining jobs have a high level of risk and danger, which often translates into higher wages for workers. This can lead to coal miners being paid more than workers with similar levels of education but in less risky professions. The other answer choices are not relevant to the statement.

Question 5

A difference in wages that reflects differences in the nonpay features of two jobs is called

Accepted Answer

A compensating differential refers to the difference in wages that compensates for differences in nonpay features such as working conditions, job security, or job flexibility. For example, a job that requires working in dangerous conditions may offer higher wages as a compensating differential for the risk involved.

Question 6

Park rangers at Yellowstone National Park are known to have low wages.This is probably because

Accepted Answer

The answer of Park rangers at Yellowstone National Park are...

Question 7

Which of the following comparisons best illustrates a compensating differential?

Accepted Answer

A compensating differential occurs when one worker receives a higher wage than another worker performing a similar job to compensate for the risks or negative aspects of the job. In this case, Karl's wage is higher than Kay's because his job may cause long-term health problems, which is a compensating differential. John's wage being higher due to his higher productivity or Beth's wage being higher due to her personability are not examples of compensating differentials.

Question 8

If a worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour,then the

Accepted Answer

Since the worker is indifferent between a job with a wage of $12 per hour and a job with a wage of $15 per hour, the extra $3 per hour is a compensating wage differential. This means that the higher-paying job compensates for other undesirable aspects, such as longer hours, less pleasant working conditions, or greater risk.

Question 9

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing.This can be partially explained by the fact that

Accepted Answer

Plumbers who work with sewer lines are often perceived as having a "dirty" job, which can lead to higher wages to compensate for the less desirable working conditions.

Question 10

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

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.

Question 11

Many kindergarten teachers have advanced educational degrees,yet they have lower average earnings that other individuals with similar educational levels.A potential explanation for the differences in earnings is that kindergarten teachers

Accepted Answer

Kindergarten teachers may accept lower wages in exchange for more pleasant working conditions, such as a nurturing environment and the opportunity to work with young children.

Question 12

The job of night watchman at the Punxsutawny Phil Groundhog museum is known to have a high wage.This can be partially explained by the fact that the job is likely to

Accepted Answer

The job is likely to be incredibly dull, which would explain the high wage.

Question 13

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

Accepted Answer

The difference in pay between electricians who work on dangerous high-voltage power lines and those who don't is due to a compensating differential. This is because the work of the former group involves more risk and danger, and therefore requires additional compensation to attract and retain workers. The other options (A, B, and C) do not fully capture the reason for the wage differential in this case.

Question 14

Other things equal,a particular job will likely pay a higher wage if it involves

Accepted Answer

The answer of Other things equal,a particular job will likely...

Question 15

Professional underwater divers are known to have high wages and work an average of only 20 hours per week.The high wages are partially explained by the fact that the job is likely

Accepted Answer

Professional underwater diving is very dangerous and often involves working in hazardous environments, such as deep water or under ice. Due to the high level of risk involved, employers are willing to pay a premium for the services of experienced and skilled divers.

Question 16

Public school teachers are known to have low wages.This is probably because

Accepted Answer

Many people perceive the job of public school teacher to have a high element of personal satisfaction, which can lead to lower wages as individuals may accept lower pay for the intrinsic rewards of the job.

Question 17

Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work on the night shift.The difference in pay is attributed to

Accepted Answer

A compensating differential is a difference in pay that is offered to workers for working under more difficult or undesirable conditions, such as working at night. In this case, the night shift is likely less desirable for most workers, and therefore the higher pay is offered as a compensating differential to attract workers to that shift. The other choices are not as appropriate, as the marginal product of labor and capital and diminishing marginal returns would not likely result in a pay differential between day and night shifts.

Question 18

Assuming that all other things are equal,including the wage,which of the following statements is correct?

Accepted Answer

The answer of Assuming that all other things are equal,including...

Question 19

Store clerks are known to have low wages.This is likely to be reflect the fact that

Accepted Answer

Store clerk jobs are often perceived to be low-skill and require minimal training or education, leading to a larger pool of potential workers and lower wages due to supply and demand dynamics.

Question 20

Wage differences that can't be explained by the number of years of training could result from

Accepted Answer

Compensating differentials refer to wage differences that are not solely based on differences in training or skill level, but rather on other factors such as working conditions, location, and job risks. Therefore, wage differences that cannot be explained by training may result from compensating differentials. The other options (A) demand, (B) supply, and (D) marginal product of capital, do not directly address compensation differentials.

Quiz 19: Earnings and Discrimination