An example of a compensating wage differential is
A)Nurse anaesthetists are paid less than anaesthesiologists (who have medical degrees).
B)Workers in a dynamite mine receive higher wages than if they worked in other jobs that require the same level of skills.
C)In the market for lawyers, top graduates from the top programs earn starting salaries that are significantly higher than the starting salaries earned by lower-ranked graduates from the lower-ranked programs.
D)Popular movie stars like George Clooney command much higher salaries than other talented but lesser-known actors.

Question

Quizplus · Accepted Answer

The compensating wage differential in this case is the higher wage paid to workers in a highly dangerous job like a dynamite mine, as compared to other jobs that require similar skill levels. This higher wage compensates for the risk and danger involved in the job. Options A, C, and D are not examples of compensating wage differentials.

An Example of a Compensating Wage Differential Is