The fact that wage differentials continue to exist across different groups of workers has led economists to believe that:
A)discrimination is in fact a very large economic problem
B)firms apparently are not profit maximisers
C)differences in human capital and job characteristics must be important in explaining the differences in wages
D)the market has failed to properly allocate wages to different workers

Question

Quizplus · Accepted Answer

The existence of wage differentials indicates that differences in human capital (such as education, experience, and skills) and job characteristics (such as working conditions and job responsibilities) are important in explaining the differences in wages. This suggests that wage differentials are at least in part a result of market forces, rather than discrimination or firm behavior.

The Fact That Wage Differentials Continue to Exist Across Different