Question 1

In the taste for discrimination model, the perceived cost for a prejudiced white employer for hiring an African-American worker is

Accepted Answer

The taste for discrimination model suggests that prejudiced white employers factor in not only the wages of African-American workers, but also the disutility - or negative psychological impact - from hiring an African-American worker. Therefore, the perceived cost for hiring an African-American worker is the sum of their wages and the monetary value of the disutility. Choice C correctly reflects this concept.

Question 2

If a prejudiced white employer behaves as if there is a disutility from hiring an African-American worker, then this disutility is measured by the

Accepted Answer

The discrimination coefficient measures the disutility that a prejudiced white employer assigns to hiring an African-American worker, based on discriminatory attitudes and beliefs. It is a measure of the degree of prejudice and discrimination in the labor market. The employment coefficient, occupational coefficient, and affirmative action coefficient are not directly related to the employer's prejudice and discriminatory behavior towards a specific group of workers.

Question 3

The crowding model of occupational discrimination suggests that occupational segregation results in

Accepted Answer

The crowding model suggests that occupational segregation results in certain groups of workers being crowded into certain lower paying occupations, leading to an overall lower domestic output than would be the case if all workers had equal opportunity to enter any occupation.

Question 4

From the economic point of view, discrimination

Accepted Answer

Discrimination limits opportunities for certain groups and deprives society of their potential contributions to the economy, resulting in an actual output that is below potential output. This can occur in terms of lower productivity, lower quality of work, lower wages, or reduced access to education and training. Discrimination can also disrupt the allocation of resources and hinder competition, leading to inefficiencies in markets.

Question 5

The taste-for-discrimination model examines an employer's prejudice and discrimination in hiring by using tools of

Accepted Answer

The taste-for-discrimination model analyzes the behavior of employers based on their preferences, which are not solely based on profit motive. This approach utilizes demand theory to analyze the employer's preferences and factors that impact their decision-making process. Therefore, the correct answer is A.

Question 6

The judging of an individual on the basis of the average characteristics of the group to which the individual belongs rather than the individual's characteristics is

Accepted Answer

This is a clear description of statistical discrimination, where an individual is judged based on the group they belong to rather than their personal characteristics. Reverse discrimination involves favoritism towards a particular group, human capital discrimination is based on an individual's skills and education, and wage discrimination is based on unequal pay for the same work between individuals of different groups.

Question 7

In statistical discrimination,

Accepted Answer

In statistical discrimination, the average characteristics of the group are applied to individual members. This can lead to unfair treatment and assumptions about individuals based on their group membership.

Question 8

Assume that there is a supply and demand market for nonpreferred workers. If prejudice against these workers among employers decreases, then there will be a(n)

Accepted Answer

When prejudice against nonpreferred workers decreases, it means that more employers are willing to hire these workers. This leads to an increase in demand for these workers, which in turn increases their wage rate and employment. The supply of these workers may also increase as more individuals are willing to work in this market, but the increase in demand will have a greater impact on the market than the increase in supply. Therefore, option B is the correct choice.

Question 9

If a law firm prefers to hire men over women because the firm has found men to be more productive, on average, then the firm is practicing

Accepted Answer

The law firm is using statistical discrimination, which is when an individual is judged based on a group's average characteristics. In this case, the firm is assuming that all men are more productive than all women based on the average productivity of each gender. This type of discrimination is still illegal, even if the employer believes that it is based on productivity.

Question 10

The difference between household assets and liabilities is referred to as

Accepted Answer

Household assets refer to everything a household owns such as property, vehicles, investments, and cash, while liabilities refer to debts owed such as mortgages, car loans, and credit card balances. The difference between household assets and liabilities is known as net worth, which represents the value of the household's assets minus its liabilities. Therefore, the correct answer is C, net worth.

Question 11

Assume that there is a supply and demand market for nonpreferred workers. If prejudice against these workers among employers increases, then there will be a(n)

Accepted Answer

Prejudice against nonpreferred workers would decrease the demand for them, resulting in a decrease in their wage rate and employment. The supply of these workers may also decrease if some of them choose to leave the labor market due to discrimination.

Question 12

When the occupational choices of women or minorities are restricted, this results in

Accepted Answer

When the occupational choices of women or minorities are restricted, it results in lower wages for these groups. This is because the supply of labor exceeds the demand for labor in the restricted occupations, leading to a decrease in wages. Additionally, this results in a less efficient allocation of labor resources as qualified individuals may not be able to access the jobs that best match their skills, education, and experience. This can negatively impact productivity and economic growth as a whole.

Question 13

The crowding of certain ethnic or racial groups into specific occupations results in

Accepted Answer

Crowding of certain ethnic or racial groups into specific occupations results in a lower wage for those groups as well as a less efficient allocation of resources. This is because when a specific group dominates an industry, employers can set wages lower as there is less competition for jobs. Additionally, having an industry dominated by specific groups can result in a lack of diversity and creativity, which can hinder innovation and progress.

Question 14

Ending discrimination against minority groups in educational processes and in employment situations would cause total domestic output to

Accepted Answer

By ending discrimination against minority groups in educational processes and in employment situations, the talent pool of the labor force would increase, resulting in a larger pool of skilled workers. This would increase the productivity of the labor force, which would in turn increase the total domestic output. Therefore, option C is the correct answer. Option A is incorrect because increased training and living costs may be outweighed by the benefits of having a more skilled workforce. Option B is incorrect because the increase in output due to the productivity of a more skilled workforce would likely offset any decrease in consumer spending. Option D is incorrect because the trained minority workers would not necessarily force present workers out of their jobs but could rather complement them, leading to an increase in output.

Question 15

In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

Accepted Answer

A reduction in employer prejudice against nonpreferred workers will increase demand for these workers as employers become more willing to hire them. This increase in demand will raise the wage rate and increase the employment of these workers. Thus, choice D is the correct answer.

Question 16

Suppose that white workers are getting paid $21/hour, while similarly productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will

Accepted Answer

A prejudiced employer with a discrimination coefficient of $24/hour perceives the cost of hiring African-American workers as $18 + $24 = $42/hour, which is higher than the $21/hour for white workers. Therefore, they will not hire African Americans, even if they offer to work for free, as the perceived cost is still higher.

Question 17

Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $3. This employer will be indifferent between hiring African Americans and whites only when the African-American wage rate is

Accepted Answer

The employer will be indifferent when the cost of hiring African Americans, including the disutility, equals the wage rate for whites. So, $15 (African-American wage rate) + $3 (disutility) = $18 (white wage rate).

Question 18

Suppose that a prejudiced African-American employer has a discrimination coefficient of $5/hour. Suppose also that the market wage rate is $20/hour for African- American workers, and $18/hour for Hispanic workers. In this case, the employer will

Accepted Answer

The employer's discrimination coefficient of $5/hour means they perceive the cost of hiring Hispanic workers as $18 + $5 = $23/hour. To be indifferent between hiring African-American workers at $20/hour and Hispanic workers, the perceived cost for Hispanic workers must also be $20/hour, which means their actual wage must fall to $15/hour ($20 - $5).

Question 19

The crowding of women, African Americans, and certain ethnic groups into less-desirable, lower-paying occupations is

Accepted Answer

Occupational segregation refers to the phenomenon where certain groups are overrepresented in certain occupations and industries while underrepresented in others. This can lead to lower pay and less desirable working conditions. Women, African Americans, and certain ethnic groups often face occupational segregation, which perpetuates income and wealth inequality. The other options are not as applicable in this context. Employment discrimination refers to unfair treatment in hiring or promotion, human capital discrimination refers to differential treatment based on skills or qualifications, and statistical discrimination refers to the use of group-based characteristics to make assumptions about individuals.

Question 20

Suppose that a prejudiced white employer is willing to hire white workers at a rate of $16/hour, and this employer has a discrimination coefficient of $4. This implies that the employer would

Accepted Answer

The discrimination coefficient of $4 means that the prejudiced employer values a white worker $4 more than a nonwhite worker. Therefore, to hire a nonwhite worker, the wage rate must be $4 less than what the employer would pay a white worker, which is $16/hour. Thus, the employer would hire a nonwhite worker at a rate of $12/hour or less.

Quiz 23: Income Inequality, Poverty, and Discrimination