Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 19 - Part VI - Earnings and Discrimination - Quick Check Multiple Choice - Page 410: 2

Answer

a. a compensating differential

Work Step by Step

Compensating differential is the concept of explaining wage differences in terms of non monetary characteristics of the job like the ease of working, conditions of the work environment, efforts involved in the job etc. In the case of Lucy and Ethel, Lucy does the job if greeting customers which is easy, fun and less straining compared to the job of Ethel who cleans the bathrooms which is hard, dull and involves a filthy work environment.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.