sidewalk. Assume that men and women each make up about 50% of the total workforce in the United States. Further, assume that corporate managers care solely about profits. They want to maximize their value in the eyes of shareholders. (Profit maximizing assumption). Also assume that corporations pay about 2/3 of their revenue to employees, while the remaining 1/3 goes back to the stockholders and bondholders. So, for every $300 in revenue, $200 goes to employees in the form of wages and the remaining $100 is paid (50/50) to stock and bondholders. Finally, assume that corporate hiring managers pay women $0.75 for every $1.00 they pay men (gender wage gap) and a majority of their hires are men (75%) while women make up only 25% of the hires. (Shareholders no nothing about what employees are paid. They only know or care about the value of the stock). Question 1: By what percentage could a corporation increase the value of its stock if its managers decided not to be discriminatory in their hiring practices? Question 2: Given your answer to question 1, what is the price of discrimination to the corporation? Would you consider the cost of discrimination large? or small? Question 3: Given your answer to question 2, what do you think explains the gender pay gap in this example? Question 4: What lessons might this exercise offer for understanding gender wage disparities in the real world