The idea of compensating differences is used
A) by inclusive unions as an argument in bargaining for wage rate increases.
B) to justify the application of minimum wages to low-wage labor markets.
C) to explain the divergence between wage rates and marginal resource cost.
D) to explain wage rate differences based on differing nonmonetary aspects of jobs.

Question

Quizplus · Accepted Answer

The idea of compensating differences is used to explain wage rate differences based on differing nonmonetary aspects of jobs. For example, jobs that require more unpleasant or dangerous tasks may pay higher wages to compensate for these drawbacks.

The Idea of Compensating Differences Is Used