Sam and Bob have the same educational background.Both have been policemen in Calgary for 10 years.Sam works from 11 P.M.until 7 A.M. ,and Bob works from 7 A.M.until 3 P.M.Sam's salary is $800 per month,which is higher than Bob's salary.This example illustrates a wage disparity due to:
A) efficiency wages.
B) market power.
C) compensating differentials.
D) discrimination.

Question

Quizplus · Accepted Answer

The wage disparity is due to compensating differentials, which means that Sam is receiving a higher wage because he is working during less desirable hours (night shift). This is not discrimination or market power, and there is no indication of efficiency wages being in play.

Sam and Bob Have the Same Educational Background