Which of the following is an example of a labor market characterized by compensating differentials?
A)A nursery school teacher earns less than a university professor.
B)Two real estate agents paid on commission earn different salaries due to different listings and sales volumes.
C)Adjustments are made to the salaries of teachers in different states to equalize the purchasing power of income.
D)Outside window washers of skyscrapers earn higher salaries than outside window washers of single family homes.

Question

Quizplus · Accepted Answer

Compensating differentials refers to the difference in pay for jobs with similar skills and educational requirements, but with different working conditions or risks. The job of a window washer on a skyscraper is more dangerous and requires a higher degree of skill than the job of a window washer of a single-family home. Therefore, the higher salary of outside window washers of skyscrapers is an example of a labor market characterized by compensating differentials.

Which of the Following Is an Example of a Labor