Karen works as an emergency-room nurse at a hospital.Although her regular shifts last 8 hours,she has to work twelve-hour shifts on Saturday and Sunday.For these extra hours that she puts in during the weekends,Karen's hourly wage is doubled.Karen's income during the weekends is an example of:

Question

Quizplus · Accepted Answer

Karen's increased wage during the weekends is an example of a compensating wage differential, where she is compensated with a higher wage for working longer or less desirable shifts. This differs from a labor-leisure tradeoff, which refers to the decision individuals make to trade off time spent working with leisure time. The other options, increasing marginal revenue product and diminishing marginal product of labor, are not relevant to Karen's situation as they refer to the productivity and revenue generated from additional units of labor, rather than the compensation for working longer hours.

Karen Works as an Emergency-Room Nurse at a Hospital