Jackson is considering two different jobs,and is indifferent to both of them although one pays $20 per hour and the other pays $25 per hour.This must mean that
A)the higher-paying job must be more dangerous than the lower-paying job
B)the higher-paying job enjoys a compensating wage differential of $5 per hour
C)Jackson doesn't really need the money
D)the lower-paying job enjoys a compensating wage differential of $5 per hour
E)the higher-paying job enjoys a compensating wage differential of $20 per hour

Question

Quizplus · Accepted Answer

Jackson's indifference shows that he is willing to trade off higher pay for some other factor, likely a compensating wage differential such as greater risk or unpleasant working conditions. Therefore, the higher-paying job must have a compensating wage differential of $5 per hour to make Jackson indifferent between the two options.

Jackson Is Considering Two Different Jobs,and Is Indifferent to Both