Nancy and Sheila are both loan officers who started working for their current employer during the same year, graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy earned a master's degree last year. If Nancy earns a higher annual salary than Sheila because she has more formal education, the employer is
A)basing pay on experience.
B)paying efficiency wages.
C)practicing discrimination.
D)rewarding increases in human capital.

Question

Quizplus · Accepted Answer

The employer is rewarding increases in human capital, as Nancy's higher annual salary is due to her additional education (master's degree), which has increased her human capital.

Nancy and Sheila Are Both Loan Officers Who Started Working