Mary and Mike are twins who attended grammar school through college together. Both twins got jobs in the same department of an accounting firm. They both work equally hard and have received similar performance reviews. Mary earns $62,000 a year, and Mike earns $80,000 a year. Select the best explanation for this wage difference
a. Mary has less human capital than Mike.
b. Mary has more human capital than Mike.
c. Mike has been discriminated against because he is male.
d. Mary has been discriminated against because she is female.
d
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When the government decides to impose a tax on sellers of a good or service, sellers try to pass the tax on to consumers by raising the price of the good being sold
Assume the government decides to place a $1 tax on each unit of a good sold, e.g., tires. Using the simple model of supply and demand, illustrate what would happen to the price and quantity of tires sold. Would the amount of tax paid by the consumer (as opposed to the producer) be greater when demand is elastic or inelastic? Why?
Farmers who joined the Greenback Party in the late-19th century felt that
a. the government should make efforts to curb the inflation that the country was experiencing. b. farm prices were too high in comparison to the overall price-level of the economy. c. the government should own all transportation and communication facilities. d. an increase in the money supply would benefit debtors.
In calculating the Consumer Price Index
A. the price of each item is allowed to change between the base period and current year but the quantity is held constant. B. the quantity of each item is allowed to change between the base period and current year but the price is held constant. C. both the price and quantity of each item is allowed to change between the base period and current year. D. neither price nor quantity of each item is allowed to change between the base period and current year.
Cross elasticity of demand measures how sensitive purchases of a specific product are to changes in:
A. the price of some other product. B. the price of that same product. C. income. D. the general price level.