Scenario 19-3 Ethan Works for the Local Piano Moving Company Part Time

question 44

Multiple Choice

Scenario 19-3
Ethan works for the local piano moving company part time after school.Ethan has worked on the job for a couple of years but still hasn't received a wage increase even though newer employees have received raises.Ethan has threatened his employer with a lawsuit if he doesn't get a raise in the next few weeks.Ethan believes he is a victim of labour-market discrimination.
-Refer to Scenario 19-3.Why might an economist be skeptical of Ethan's discrimination complaint

• A)Market equilibrium will eliminate discrimination.
• B)In a competitive market, employers pay employees based on their value to the firm.
• C)Only profit maximizers practice discrimination.
• D)Only cost minimizers practice discrimination.

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Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the discount rate that makes the net present value of all cash flows from the investment equal to zero.

Hurdle Rate

Hurdle Rate is the minimum acceptable return on investment or project that a business requires before it considers it viable or proceeds with it.

Accounting Rate of Return

The return on an investment calculated by dividing the average annual profit by the initial investment cost, typically used to assess the profitability of potential investments.

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period.