Which statement describes a compensating differential?
A)Tiger Woods gets paid more than does a college professor.
B)A window washer working in a suburban residential subdivision gets paid less than does one who is washing windows on the outside of a skyscraper.
C)A nuclear scientist gets paid more than does a janitor working in the same building.
D)On average,White men get paid more than do women of all ethnicities.

Question

Quizplus · Accepted Answer

A compensating differential is the difference in wages that is necessary to offset the non-monetary characteristics of a job. In this case, the window washer working in a more dangerous location (on the outside of a skyscraper) is compensated with a higher wage to offset the risk and discomfort of the job, compared to the one working in a suburban residential subdivision.

Which Statement Describes a Compensating Differential