From a Purely Economic Point of View, Discrimination Exists When

question 5

Multiple Choice

From a purely economic point of view, discrimination exists when

• A)black teenagers earn more than white teenagers.
• B)all factors are earning average products.
• C)women earn less than men.
• D)equivalent factors earn different payments for equal contributions to output.

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Definitions:

Seller

An individual or business that offers goods or services for sale to consumers or other businesses.

Lemons Problem

A phenomenon where the presence of information asymmetry in a market leads to low-quality products being sold, as sellers have more information about the product than buyers.

Moral-Hazard

A situation where one party engages in risky behavior knowing that it is protected against the risk because another party will bear the cost.

Above-Equilibrium Wages

Wages that are higher than the market equilibrium, often used by employers to reduce turnover or increase productivity.