The difference between the average earnings of eye surgeons and those of janitors is an example of
A)a temporary differential
B)a permanent differential
C)a resource price difference that will cause a reallocation of resources to different uses
D)a temporary difference that will be eliminated through the reallocation of resources to different uses
E)a differential caused by a lack of resource mobility

Question

Quizplus · Accepted Answer

The difference between the average earnings of eye surgeons and those of janitors is a permanent differential because it is unlikely to be eliminated even with the reallocation of resources over time. It is mainly due to differences in skill and education levels, which are not easily changeable.

The Difference Between the Average Earnings of Eye Surgeons and Those