Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

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

Answer

a. a compensating differential

Work Step by Step

Compensating the disparity is the idea of describing pay disparities in terms of non-monetary aspects of a task, such as quality of employment, working environment conditions, work ability, etc. In the case of Lucy and Ethel, Lucy does the job of welcoming customers who are simple, enjoyable and less stressful compared to Ethel 's job of cleaning the toilets, which is rough, boring and entails a dirty work atmosphere.
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