Some economists argue that discrimination based on race and sex cannot lead to persistent wage differentials. What is their argument?
What will be an ideal response?
In short, wage differentials will lead to price differentials. The price of the output produced by workers suffering discrimination will be less than the price of output produced by favored workers. If the goods are the same, this price differential cannot persist. An increase in the demand for the good produced by the discriminated-against group will raise the demand for their labor and thereby increase their wage.
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Which of the following is the BEST example of a common resource?
A) a can of Mountain Dew B) fish in the ocean C) cable television D) national defense
Targeting reserves would be the best choice if
A) there is a close and predictable relationship between bank reserves and total spending. B) there is an unpredictable relationship between bank reserves and total spending. C) the discount rate is fixed. D) private sector spending is very stable.
Refer to the above figure. Moving from point A to point B indicates
A) an increase in supply. B) an increase in quantity supplied. C) a decrease in supply. D) a decrease in quantity supplied.
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
a. cash bonuses based on length of service with the firm b. bonuses for resisting hostile takeovers c. requiring officers to own stock in the company d. large corporate staffs e. a, b, and c only