Economics Discrimination and Competition

4) State whether the following examples of discrimination are likely to be eliminated by competition and explain why or why not:

(a) A health club refuses to hire an obese person to be a personal trainer because customers do not want to work with an obese personal trainer.

ans...This is demand-side discrimination based on individual characteristics that will affect job performance.The answer is no, the discrimination will likely not be eliminated because it has an economic motivator. If a firm does not discriminate, it costs them money.

(b) A computer store doesn't hire senior citizens because it doesn't believe that they keep up with current technology, although there are tests the company could give to determine capability.

ans..This is demand-style discrimination based on group characteristics. These assumptions are made because the person is a member of a group who usually has particular characteristics that will affect job performance. The answer is no, the discrimination will likely not be eliminated because it has an economic motivator. If a firm does not discriminate, it costs them money.

(c) An elementary school doesn't hire male teachers for first grade because the principal doesn't think men are warm and caring, despite the fact that there is no evidence for this.

ans...This is demand-style discrimination based on irrelevant individual characteristics that do not affect job performance, or incorrectly perceived statistical characteristics of a group.

The answer is yes, the discrimination will likely be eliminated by competition because it does not have economic motivation. Other firms will have a competitive advantage, and actually benefit from the discriminating firms behavior.