Upon graduation, Ellie had two job offers. The jobs were identical in every way with two exceptions. One job was located in San Diego, CA and offered an annual salary of $50,000. The other job was located in Omaha, NE and offered an annual salary of $60,000. The salary difference is due to

Question

Quizplus · Accepted Answer

Compensating differentials refer to wage differences across jobs that are not identical, accounting for factors like location, working conditions, and job security. In this case, the salary difference between the two locations likely reflects the cost of living and other quality-of-life factors associated with each location, fitting the concept of compensating differentials.

Upon Graduation, Ellie Had Two Job Offers