Suppose that Group Z workers earn only 75% of what Group A workers earn.Discrimination is
A)Equal to 25%
B)Equal to the portion of the gap created by differences in personal characteristics
C)Equal to the portion of the gap that cannot be explained by productivity differences between the groups
D)Readily apparent between the two groups
E)Subject to a variety of different economic measurements

Question

Quizplus · Accepted Answer

Discrimination refers to the gap in earnings between two groups that cannot be explained by productivity differences. In this scenario, Group Z workers earn only 75% of what Group A workers earn; if there are no differences in productivity between the two groups, then the remaining 25% of the earning gap is due to discrimination. Therefore, the answer is C, which states that discrimination is "equal to the portion of the gap that cannot be explained by productivity differences between the groups."

Suppose That Group Z Workers Earn Only 75% of What