Consider the following statements. For each one, is it true or false? If false,
ID: 1108618 • Letter: C
Question
Consider the following statements. For each one, is it true or
false? If false, rewrite it to make it a true statement.
1. If the wage-schooling locus is concave, it means that there are diminshing returns to
education.
2. When firms use beliefs about a group (stereotypes) to make judgments about individual
workers' abilities, they are using what is known as psychological discrimination.
3. If there is discrimination against a certain groups of workers, it can be driven by
prejudice of the employer or the customers.
4. According to Gary Becker's discrimination framework, firms who discriminate against
a certain group of workers maximize profits.
5. According to Gary Becker's discrimination framework, firms who prefer to hire the
workers who are normally discriminated against are maximizing profits
Explanation / Answer
1) This statement is true .
Because , the wage schooling is a theory in which firms are willing to pay workers on their level of education or depending on the level of schooling. The wage schooling locus is upward sloping which indicates there is a increase in income for the additinal year of education and wage schooling is concave which reflecting diminishing returns to schooling. Thus this is statement is true.
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