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Suppose a Firm Pays White Workers $40 an Hour but Pays

Question 147

Multiple Choice

Suppose a firm pays white workers $40 an hour but pays black workers who are as productive as the white workers $25 an hour.


A) This firm could increase profits by hiring more black workers at $25 and using fewer white workers.
B) This firm is practicing statistical discrimination.
C) This firm is a profit maximizer because it is saving money on the hiring of black workers.
D) This is an example of employer discrimination, which means that the wage differentials are likely to not be competed away.

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