Final answer:
Differences in wages among workers can stem from various factors such as differences in human capital, natural ability, and compensating differentials for less desirable job conditions.
Step-by-step explanation:
Reasons for Differences in Earnings
For the scenario involving Rina, a recent PhD graduate, and Bob, a recent master's degree graduate in economics with different annual wages, the most likely reason for the difference in earnings is Differences in Human Capital. The difference in their educational qualifications, with Rina having a higher degree, justifies the wage disparity.
When considering major league baseball pitchers earning more than minor league baseball pitchers, the most likely reason is natural ability and the level of competition. Major league players are typically of a higher skill level, which, combined with the audience and revenue they draw, justifies their higher earnings.
In the case of two automotive technicians with the same amount of schooling and experience but different wages due to different shifts, the second technician's higher wage for the night shift is a classic example of a Compensating Differential. The night shift might be less desirable and therefore offers higher compensation to attract workers.