Question

Chloe and Guilherme both work at the local factory producing cars. Chloe earns $22 per hour working the day shift, and Guilherme earns $25 per hour working the night shift. Chloe and Guilherme do the same job, have the same experience, and have the same level of education. This means that the a. higher-paying job has a compensating wage differential of $25 per hour. b. higher-paying job is intrinsically more attractive than the lower-paying job. c. factory is discriminating against Chloe because she is a woman. d. higher-paying job has a compensating wage differential of $3 per hour.

Answer 1

Answer: d. higher-paying job has a compensating wage differential of $3 per hour.

Step-by-step explanation:

Compensating wage differential is the amount paid to a worker to entice them to take a less attractive job. In this scenario, the less attractive job is working the night shift which is what Guilherme is doing.

To compensate Guilherme for taking this job, the company is paying $25 instead of the $22 it is paying Chloe. This means that the compensating wage differential is the difference which is:

= 25 - 22

= $3