Given that workers differ in terms of ability and effort, firms are likely to pay people different wages even in the absence of discrimination.

Question

Quizplus · Accepted Answer

Workers have diverse skills, education, background, and work experience. Besides, some employees might work harder or produce more than others. Therefore, firms set wages based on employees' productivity, skills, and effort, resulting in wage differentials.

Given That Workers Differ in Terms of Ability and Effort