Under normal circumstances, the equilibrium compensation wage differential is the wage differential that exactly attracts the
A) average worker into a regular job.
B) marginal worker into a risky job.
C) average worker into a less risky job.
D) marginal worker into the labor market.
E) average high-skilled worker into a low-skill job.

Question

Quizplus · Accepted Answer

The equilibrium compensation wage differential is the additional amount of money that a worker must be paid to move from a less risky to a more risky job, or vice versa, to keep them indifferent between the two. This concept typically applies to the marginal worker, who is the last worker willing to make the switch for the given wage differential, thus making choice B correct.

Under Normal Circumstances, the Equilibrium Compensation Wage Differential Is the Wage