When Employment Discrimination Results from the Personal Prejudices of Employers

question 73

Multiple Choice

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

• A) competitive forces will tend to reduce discrimination.
• B) the wages of employees who are discriminated against will rise.
• C) an employer who discriminates will have the same costs as those who do not discriminate.
• D) discrimination by an employer will reduce production costs since the employer can pay lower wages.

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Definitions:

Rational Decisions

Choices made by individuals that align with their own self-interest and are based on an evaluation of the costs and benefits of the action.

Marginal Costs

The extra financial burden of generating one additional unit of a good or service.

Marginal Benefits

The incremental satisfaction or advantage obtained from the consumption of an additional unit of a good or service.

Marginal Cost

Marginal cost is the increase in total production cost that arises from producing one additional unit of a good or service.