The correct option for compensating differentials.
Answer to Problem 3MCQ
From the available options, the correct option is danger.
Explanation of Solution
Compensating differentials leads to higher wages for any loss or unpleasant condition in which workers have to perform their job such as danger. Discrimination is the unjust treatment of any worker based on caste, religion, age, etc. marginal productivity means paying workers based on their contribution and a surplus of labor involves the excessed performance of labor than the actual requirement. higher wages to employees according to the risky nature of work. And, market power refers to the payment of wages according to the minimum required wage.
Therefore, the correct option is a (danger) and other all options are incorrect as they do not attach to any unpleasant condition of work.
Introduction: According to the marginal productivity theory of income distribution, every individual will receive wage or income according to the total contribution or output that they produce.
Compensating differentials involves higher wages to employees according to the risky nature of work.
Chapter 73 Solutions
Krugman's Economics For The Ap® Course
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education