How can compensating differentials explain differences in wages ...

[corkyiscool3328]

How can compensating differentials explain differences in wages across jobs in different industries?
 
  What will be an ideal response?

Question 2

What does the demand curve tell us about the price that consumers are willing to pay?
 
  What will be an ideal response?

[jharrington11]

Answer to Question 1

A compensating differential is the difference in wage that a worker will accept as compensation for a job with additional amenities, such as a better office. Other factors being the same, some workers may be willing to accept a lower wage in return for certain job attributes like an air-conditioned office or a great view. Becausejobs in different industries have different attributes, compensating differentials could explain why wages also differ across industries.
A-head: ECONOMIC TOOLS TO VALUE HUMAN LIFE
Concept: Compensating differentials

Answer to Question 2

For any fixed quantity of a good available, the vertical distance of the demand curve from the x-axis shows the maximum price that consumers are willing to pay for that quantity of the good. The price on the demand curve at this quantity indicates the marginal benefit to consumers of the last unit consumed at that quantity.

[corkyiscool3328]

Excellent

[nathang24]

TYSM