If a worker is indifferent between a job with a wage of $10 per hour and a job with a wage of $12 per hour, then the

Question

Quizplus · Accepted Answer

A compensating wage differential is the extra amount of pay that a worker receives in order to compensate for aspects of a job that are less desirable (e.g. dangerous working conditions, longer commute). If a worker is indifferent between two jobs with different wages, it suggests that the worker is willing to take on the less desirable aspects of the lower-paying job for a lower wage, and therefore the extra $2 per hour in the higher-paying job serves as a compensating wage differential.

If a Worker Is Indifferent Between a Job with a Wage