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The Equilibrium Compensating Wage Differential Between Two Occupations in the Same

Question 29

Multiple Choice

The equilibrium compensating wage differential between two occupations in the same city is $10 per hour.Both occupations have equivalent training requirements.Shannon works in the higher-paying occupation and would have been willing to do so even if the compensating differential was $5 per hour.Therefore,


A) Shannon will migrate to the lower-paying occupation
B) Shannon must have a greater distaste than the typical worker for the nonmonetary characteristics of her occupation
C) the equilibrium compensating wage differential is more than enough to prevent Shannon from moving to the other job
D) the higher-paying occupation cannot have a perfectly competitive labor market
E) Shannon must have a greater preference than the typical worker for the lower- paying occupation

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