Compensating Differentials Theory States That

Multiple Choice

Compensating differentials theory states that:

A) higher wages must be offered to employees when chances of success are high
B) higher wages must be offered to employees to compensate for any negative features of jobs
C) high wages will increase efficiency and lower labour costs if they lower turnover
D) job seekers have a reservation wage level below which they will not accept a job offer
E) pay levels and pay mix are designed to signal desired employee behaviours