Suppose a cook at a diamond mining camp in Canada's North earns a much higher wage than a cook with similar training and experience at an office building in Halifax.Economists would likely call this
A)a temporary factor-price differential.
B)a compensating differential.
C)an intrinsic difference.
D)an acquired difference.
E)an equilibrium differential.

Question

Quizplus · Accepted Answer

The situation described is an example of a compensating differential, which is a difference in wages that compensates workers for the non-monetary costs or benefits of a particular job, such as location or working conditions. The cook in the diamond mining camp likely faces harsher working conditions and a more remote location, which is reflected in his higher wage compared to a cook in an office building in Halifax.

Suppose a Cook at a Diamond Mining Camp in Canada's