It Is Argued That Competitive Markets Provide a "Natural Remedy

question 348

Multiple Choice

It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?

• A)Governments sometimes mandate discriminatory practices.
• B)Some employees have a lot of job experience; others have little job experience.
• C)In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve.
• D)Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices.

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Definitions:

Inventory Valuation Methods

Inventory Valuation Methods are accounting processes used to determine the cost of goods sold and the inventory value at the end of an accounting period.

FIFO vs. LIFO

A comparison between two inventory valuation methods: First-In, First-Out (FIFO), where goods first bought are the first to be sold, and Last-In, First-Out (LIFO), where goods most recently bought are the first to be sold.

P/E Ratios

The price-to-earnings ratio, a valuation metric for stocks calculated by dividing the current market price of a stock by its earnings per share.

Macroeconomic Variables

Economic indicators that represent the overall health and performance of an economy, such as GDP, inflation rates, and unemployment rates.