Differences in marginal revenue products are the most important factor in explaining wage differences.Other factors that explain wage differences include all but one of the following.Which factor does not help explain differences in wages?
A)Cognitive differentials
B)Compensating differentials
C)Discrimination
D)Labour unions

Question

Quizplus · Accepted Answer

Cognitive differentials refer to differences in mental abilities and skills, which directly impact productivity and thus can explain wage differences. However, they are not considered an external factor like the others listed (B, C, D) that influence wage differences beyond individual productivity.

Differences in Marginal Revenue Products Are the Most Important Factor