The difference between the average earnings of eye surgeons and those of janitors is _____
A)an example of a temporary differential caused by a lack of resource mobility.
B)an example of a permanent differential caused by differences in the time and money involved in developing the necessary skills.
C)an example of a permanent differential caused by differences in nonmonetary aspects of the job.
D)a temporary difference that will be eliminated through the reallocation of resources to different uses.
E)an example of a permanent differential caused by a difference in the inherent quality of the resource.

Question

Quizplus · Accepted Answer

The average earnings differential between eye surgeons and janitors is likely a result of differences in the time and money involved in developing the necessary skills for each profession, which creates a permanent differential. It is unlikely to be a temporary differential caused by resource mobility, as there is little overlap in skills required for these two jobs. It is also unlikely to be a temporary difference that will be eliminated through the reallocation of resources or a difference in inherent quality of the resource. Finally, it is unlikely to be caused by differences in nonmonetary aspects of the job, as the earning differentials are large enough to suggest that monetary factors play a significant role.

The Difference Between the Average Earnings of Eye Surgeons and Those