If a firm has two plants, one located in desirable Scenic Springs and the other located in the undesirable Swamp Lands, the workers in Scenic Springs will be paid _______ than the workers in Swamp Land and the difference in wages is referred to as a______ .
A)more; worker equity payment
B)less; worker equity payment
C)less; compensating wage differential
D)more; compensating wage differential

Question

Quizplus · Accepted Answer

The workers in the desirable Scenic Springs location will be paid less because it is a more desirable place to work, while the workers in the undesirable Swamp Lands location will be paid more to compensate for the undesirable nature of their work environment. This difference in wages is known as a compensating wage differential.

If a Firm Has Two Plants, One Located in Desirable