Earnings and Discrimination
PROBLEMS’ AND APPLICATIONS 1. College students sometimes work as summer interns for private firms or the government. Many of these positions pay little or nothing. a. What is the opportunity cost of taking such a job? b. Explain why students are willing to take...
Earnings and Discrimination
QUESTIONS FOR REVIEW 1. Why do coal terrines get paid more than other workers with similar amounts of education? 2. In what sense is education a type of capital? 3. How might education raise a worker’s wage without raising the worker’s productivity? 4....
Earnings and Discrimination
CONCLUSION In competitive markets, workers earn a wage equal to the value of their marginal contribution to the production of goods and services. There are,’ however, many things that affect the value of the marginal product. Finns pay more for workers who are...
Earnings and Discrimination
CASE STUDY DISCRIMINATION IN SPORTS As we have seen, measuring discrimination is often difficult. To determine whether one group of workers is discriminated against, a researcher must correct fer differences in the productivity between that group and other workers in...
Earnings and Discrimination
DISCRIMINATION BY CUSTOMERS AND GOVERNMENTS Although the profit motive is a strong force acting to eliminate discriminatory wage differentials, there are limits to its corrective abilities. Here we consider two of the most important limits: customer preferences and...
Earnings and Discrimination
CASE STUDY SEGREGATED STREETCARS AND THE PROFIT MOTIVE In the early 20th century, streetcars in many southern cities were segregated by race. White passengers sat in the front of the streetcars, and black passengers sat in the back. What do you suppose caused...
