Answered: Suppose that a professor of labor…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose that a professor of labor economics finds that one of their research subjects has earned significantly higher wages throughout their lifetime than would be predicted by standard measured variables. The economist also notes that each of the subject's job roles was linked to social connections established at their family's yacht club.

Which item from the following list most likely explains this individual’s high earnings?

Chance

Efficiency wages

Compensating differentials

Effort

Suppose that Juanita receives higher pay from her company than her colleagues, despite the fact that they perform basically the same type of role. If Juanita's productivity is about 37 percent higher than that of her second-best colleague, which of the concepts from the following list can explain this wage disparity? Check all that apply.

Human capital

Chance

Compensating differentials

Efficiency wages

Effort

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