When earnings reflect compensating differentials, workers with _____ human capital earn _____ salaries because _____.
A)similar; different; their jobs differ in things like risk or enjoyment
B)different; the same; they show different work effort
C)similar; the same; adjustments are made to equalize the salaries
D)different; different; salaries are based on individual productivity

Question

Quizplus · Accepted Answer

Compensating differentials refer to the differences in wages that reflect the differences in the job characteristics such as risk, enjoyable or unpleasant working conditions, etc., rather than differences in human capital. Thus, workers with similar human capital may earn different salaries because their jobs differ in such characteristics.

When Earnings Reflect Compensating Differentials, Workers with _____ Human Capital