Suppose that a labour economist finds that one of her research subjects has earned significantly higher wages throughout his lifetime than would be predicted by standard measured variables. The economist also noted that each of the subject's positions was found through connections at his family's exclusive country club. Which one of the following most likely explains this person's unusually high earnings? a) Effort   b) Compensating differentials   c) Chance   d) Efficiency wages

ENGR.ECONOMIC ANALYSIS
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Alternative explanations of wage disparities

Suppose that a labour economist finds that one of her research subjects has earned significantly higher wages throughout his lifetime than would be predicted by standard measured variables. The economist also noted that each of the subject's positions was found through connections at his family's exclusive country club.
Which one of the following most likely explains this person's unusually high earnings?
a) Effort
 
b) Compensating differentials
 
c) Chance
 
d) Efficiency wages
 
 
Suppose that Frances receives higher pay at her workplace than her colleagues do, even though they perform essentially the same type of work. If Frances's productivity is about 25% higher than that of each of her colleagues, which of the following wage concepts can explain this wage disparity? Check all that apply.
a) Efficiency wages
 
b)The superstar phenomenon
 
c) Discrimination
 
d) Human capital
 
e) Natural ability
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