Some economists argue that discrimination based on race and sex cannot lead to persistent wage differentials. What is their argument?
What will be an ideal response?
In short, wage differentials will lead to price differentials. The price of the output produced by workers suffering discrimination will be less than the price of output produced by favored workers. If the goods are the same, this price differential cannot persist. An increase in the demand for the good produced by the discriminated-against group will raise the demand for their labor and thereby increase their wage.
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If the interest rate rises to 25% would the investment still take place?
a. Yes since NPV>0 b. No since NPV<0 c. Yes since the present value of the cash flows is greater than zero d. No since the present value of the cash flows is lesser than zero
Which of the following prohibits executives of competing firms from even talking about fixing prices?
a. Sherman Act b. Clayton Act c. Federal Trade Commission d. U.S. Justice Department