Question

2. Alternative explanations of wage disparities 

Suppose that a labor 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 notes 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? 

• Chance 

• Compensating differentials 

• Efficiency wages 

• Effort 

Suppose that Yvette receives higher pay at her workplace than her colleagues do, even though they perform essentially the same type of work. If Yvette'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. 

• Human capital 

• The superstar phenomenon 

• Chance 

• Natural ability 

• Efficiency wages

Answer 1

1. (A) chance

Reason The economist also noted that each of the subject's position was found through connections at his family's exclusive country club. this is luck by chance he has. so this option is correct. rest option does not lead to higher wage in one's life time.

2. answer is A and E human capital and efficiency wages

According to this, wage disparity result of effciency or effort and human capital with which she performs the same type of work better than her colleagues but her productivity is about 25% higher which is an effort to perform well and being a human capital she has more knowledge and skills than other that help her to perform the job more effciently than other.