Kiara is the best eye surgeon in town, and she earns $250,000 a year. Jasmine is an average eye surgeon in town, and she earns $180,000 a year. Kiara's skills as a surgeon are

A) valued more by the market relative to Jasmine's and that explains why her income is higher than Jasmine's.
B) valued less by the market relative to Jasmine's and that explains why her income is higher than Jasmine's.
C) valued less by the market relative to Jasmine's and that explains why her income is lower than Jasmine's.
D) more expensive because she receives a compensating differential.

Question

Hilder Jepkoech · Accepted Answer

Final Answer : A, Explanation :  Kiara's higher income compared to Jasmine's indicates that the market values her skills more, which is why she earns more. This is a reflection of the economic principle that higher skills or better performance often lead to higher compensation.

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