Scenario 19-5 Jason Works Part-Time at a Grocery Store After School. Jason

question 316

Multiple Choice

Scenario 19-5
Jason works part-time at a grocery store after school. Jason has worked at the store for two years but still hasn't received a wage increase, even though newer employees have received raises. Jason has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks. Jason believes he is a victim of labor-market discrimination.
-Refer to Scenario 19-5. Why might an economist be skeptical of Jason's discrimination complaint?

• A)Through antitrust laws, discriminating firms can be penalized with large fees.
• B)Differences in wages alone do not by themself prove discrimination.
• C)Discrimination leads to profit maximization.
• D)Even if customers dislike Jason because he's not helpful, if the store operates in a competitive market the store will pay Jason the same as other workers.

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Definitions:

Underwriter

A person or organization that evaluates and assumes the risk of another entity, often involved in issuing new securities as part of public offerings.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership such as options.

Floatation Costs

The expenses incurred by a company when issuing new securities, including underwriting fees, legal fees, and registration fees.

Firm Commitment

A type of underwriting where an underwriter agrees to buy all the unsold shares in an offering and sell them to the public.