Upon graduation, Shawntae had two job offers. The jobs were identical in every way with two exceptions. One job was located in Ft. Lauderdale, FL and offered an annual salary of $95,000. The other job was located in Tulsa, OK and offered an annual salary of $72,000. All else equal, the salary difference is due to

Question

Quizplus · Accepted Answer

Compensating differentials refer to wage differences among jobs that are attributable to non-monetary characteristics of different jobs, such as location, working conditions, job security, and so on. In this case, the difference in salary between the two identical jobs in Ft. Lauderdale, FL, and Tulsa, OK, can be attributed to the cost of living or desirability of the location, which are factors considered under compensating differentials.

Upon Graduation, Shawntae Had Two Job Offers