If One Looks at U

question 8

Multiple Choice

If one looks at U.S. Census data and finds that the average white salary is $39,000 while the average black salary is $36,000, which of the following is not likely to be a significant cause of this difference given U.S. labor market demographics?

• A)Whites are more inclined than blacks to work part-time.
• B)Blacks have less education than whites.
• C)Labor market discrimination.
• D)Whites are more likely than blacks to hold positions in upper management.
• E)Whites are more likely than blacks to own their own business.

---

Definitions:

Income Effect

The relationship between changing income in a person's life or the economy and the subsequent demand for certain goods or services.

Perfect Substitutes

Goods for which consumers are willing to replace one for the other at a constant rate, without affecting their level of utility.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one product for another.

Income Effect

The effect of modifications in earnings for a person or the economy on how much of a good or service is sought after.