Scenario Two security guards have the same amount of schooling and work experience but earn different wages. One of them works for a prison and earns an annual wage of $55,000 per year. Another works for a museum and earns an annual wage of $34,000 per year. Hilary earns an annual salary of $70,000 as a financial analyst for a large accounting firm. Kevin works in a similar position (with similar experience and productivity) as Hilary but for a rival accounting firm that offers its employees free child care and a free gym at work. Kevin earns a salary of $55,000 per year. Latasha, a 50-year-old doctor with 20 years of experience, earns more than Nick, a 30-year-old doctor just out of medical school with the same skills and field of specialization. A law firm hires Frances, a recent graduate from law school, and pays her an annual wage of $40,000. It also hires Carlos, a second-year law student, and pays him an annual wage of $30,000. Frances and Carlos were born in the same country, attended the same university, and studied in the same graduate program. Differences in Skills and Human Capital Differences in Job Preferences Age Differences in Worker Preferences
Scenario Two security guards have the same amount of schooling and work experience but earn different wages. One of them works for a prison and earns an annual wage of $55,000 per year. Another works for a museum and earns an annual wage of $34,000 per year. Hilary earns an annual salary of $70,000 as a financial analyst for a large accounting firm. Kevin works in a similar position (with similar experience and productivity) as Hilary but for a rival accounting firm that offers its employees free child care and a free gym at work. Kevin earns a salary of $55,000 per year. Latasha, a 50-year-old doctor with 20 years of experience, earns more than Nick, a 30-year-old doctor just out of medical school with the same skills and field of specialization. A law firm hires Frances, a recent graduate from law school, and pays her an annual wage of $40,000. It also hires Carlos, a second-year law student, and pays him an annual wage of $30,000. Frances and Carlos were born in the same country, attended the same university, and studied in the same graduate program. Differences in Skills and Human Capital Differences in Job Preferences Age Differences in Worker Preferences
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:For each of the scenarios in the following table, indicate the most likely reason for the difference in earnings.
Differences in
Skills and
Human Capital
Scenario
Two security guards have the same amount of schooling and work
experience but earn different wages. One of them works for a prison and
earns an annual wage of $55,000 per year. Another works for a museum
and earns an annual wage of $34,000 per year.
Hilary earns an annual salary of $70,000 as a financial analyst for a large
accounting firm. Kevin works in a similar position (with similar experience
and productivity) as Hilary but for a rival accounting firm that offers its
employees free child care and a free gym at work. Kevin earns a salary of
$55,000 per year.
Latasha, a 50-year-old doctor with 20 years of experience, earns more
than Nick, a 30-year-old doctor just out of medical school with the same
skills and field of specialization.
A law firm hires Frances, a recent graduate from law school, and pays her
an annual wage of $40,000. It also hires Carlos, a second-year law
student, and pays him an annual wage of $30,000. Frances and Carlos
were born in the same country, attended the same university, and studied
in the same graduate program.
O
Differences in
Job
Preferences
O
O
O
O
Age
O
O
O
O
Differences in
Worker
Preferences
O
O
O
O
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