Wage Discrimination Flashcards
1
Q
Why do firms wage discriminate
A
They would be able to lower their average costs and increase their supernormal profit
2
Q
What are wage differentials
A
When workers are paid less for the same job due to economic factors
3
Q
The government outlawed wage discrimination because it leads to …?
A
Systematic Poverty
4
Q
Why could wage discrimination be a benefit for some individuals?
A
Because theoretically, it leads to the increase of job opportunities
5
Q
What is the national minimum wage for over 25s
A
£8.72
6
Q
What is a trade union
A
A group of workers who collectively bargain to improve employee welfare
7
Q
Three reasons why firms are discouraged from engaging in wage discrimination
A
Law suits
Demotivated workers
Customers may substitute away from the firm
