Use the following to answer questions :
Figure 13-5
-The higher wages in plant B in Figure 13-5, assuming no unions or discrimination and that the jobs in plants A and B are equivalent except for different working conditions, are due to compensating differentials.

Question

Use the following to answer questions :
Figure 13-5 
-The higher wages in plant B in Figure 13-5, assuming no unions or discrimination and that the jobs in plants A and B are equivalent except for different working conditions, are due to compensating differentials.

Quizplus · Accepted Answer

Compensating differentials occur when a worker is paid more for a job with less desirable working conditions, such as higher physical risk, unpleasant environment, or longer commute. In this case, the higher wages in plant B suggest that there may be some compensating differentials at play.

Use the Following to Answer Questions