---
title: "Discrimination — AP Micro Definition & Exam Guide"
description: "Discrimination is unfair treatment based on race, gender, or other traits that limits earnings. In AP Micro Topic 6.5, it's a CED source of income inequality."
canonical: "https://fiveable.me/ap-micro/key-terms/discrimination"
type: "key-term"
subject: "AP Microeconomics"
unit: "Unit 6"
---

# Discrimination — AP Micro Definition & Exam Guide

## Definition

In AP Microeconomics, discrimination is the unfair treatment of workers based on characteristics like race, gender, or ethnicity, which limits their economic opportunities. The CED lists it as one source of income and wealth inequality in Topic 6.5 (EK POL-5.B.2).

## What It Is

Discrimination in [AP Micro](/ap-micro "fv-autolink") means treating workers differently based on characteristics like race, gender, or ethnicity instead of their actual [productivity](/ap-micro/key-terms/productivity "fv-autolink"). The result is that some people earn less, get fewer job offers, or have less access to wealth-building opportunities than equally qualified workers.

Here's why this matters for the model you learned in [factor markets](/ap-micro/unit-5/intro-factor-markets/study-guide/pwArfJpGkiQNHkjkRJe8 "fv-autolink"). In a perfectly competitive labor market, each worker is supposed to be paid the value of their marginal product (EK POL-5.B.1). Discrimination breaks that link. If a woman earns 82 cents for every dollar a man earns in the same job with the same education and experience, marginal productivity theory can't explain the gap, but discrimination can. That's exactly why the CED lists discrimination alongside human capital, inheritance, tax structures, mobility, and bargaining power as a source of income and wealth inequality (EK POL-5.B.2). It also feeds wealth inequality over time, since lower income means less saving, less inheritance to pass on, and less access to financial markets.

## Why It Matters

Discrimination lives in **Topic 6.5 (Inequality)** in **[Unit 6](/ap-micro/unit-6 "fv-autolink"): Market Failure and the Role of Government**, supporting learning objective **6.5.B** (explain sources of income and wealth inequality). It also connects back to **6.5.A**, because income levels vary across groups by age, gender, and race (EK POL-5.A.1), and those group-level gaps show up in measures like the Lorenz curve and [Gini coefficient](/ap-micro/key-terms/gini-coefficient "fv-autolink"). On the exam, discrimination is your go-to answer when a question describes a pay gap that human capital differences can't explain. It's the 'everything else is equal, but pay isn't' explanation.

## Connections

### Price discrimination (Unit 4)

Same word, totally different concept. Price discrimination is a [monopolist](/ap-micro/key-terms/monopolist "fv-autolink") charging different consumers different prices to capture consumer surplus. It has nothing to do with unfair treatment of workers, but the AP exam loves testing whether you know the difference.

### Marginal productivity theory (Unit 5)

Factor markets predict wage equals the [marginal revenue product of labor](/ap-micro/unit-5/profit-maximizing-behavior-perfectly-competitive-factor-markets/study-guide/eAu2TJS5gZwvjuZTlTF1 "fv-autolink"). Discrimination is one of the big reasons that prediction fails in the real world, since two equally productive workers can earn different wages.

### [Gini Coefficient (Unit 6)](/ap-micro/key-terms/gini-coefficient)

Discrimination is a cause of [inequality](/ap-micro/unit-6/inequality/study-guide/rmL71WEQFiM4gxDOnFca "fv-autolink"); the Gini coefficient and Lorenz curve are how you measure it. When discrimination widens income gaps across groups, the Gini coefficient rises toward 1.

### Labor unions and bargaining power (Unit 6)

EK POL-5.B.2 lists bargaining power right next to discrimination as a source of inequality. Workers facing discrimination often have weaker bargaining positions, so the two sources can stack on top of each other.

## On the AP Exam

Discrimination shows up almost entirely in multiple-choice questions tied to Topic 6.5. The classic stem gives you a wage gap, like women earning 82 cents per dollar earned by men in comparable positions despite equal education and experience, and asks which factor explains it. The trick is that the question rules out human capital differences first, leaving discrimination as the answer. You should also be ready to list discrimination among the CED's sources of inequality (alongside tax structures, human capital, inheritance, mobility, and bargaining power) and to distinguish it from price discrimination, which appears in monopoly questions about consumer surplus. No released FRQ has asked about labor-market discrimination directly, but FRQs regularly test price discrimination in monopoly settings, so keeping the two separate protects easy points.

## discrimination vs Price discrimination

Labor-market discrimination (Topic 6.5) is unfair treatment of workers that creates income inequality. Price discrimination (Unit 4) is a monopoly pricing strategy where a firm charges different buyers different prices for the same product to capture consumer surplus. Price discrimination isn't 'unfair treatment' in the CED sense; it's a profit-maximizing tactic. A perfectly price-discriminating monopolist takes all consumer surplus, which is an efficiency-and-surplus question, not an inequality-source question.

## Key Takeaways

- Discrimination is unfair treatment based on traits like race, gender, or ethnicity, and the CED lists it as a source of income and wealth inequality in EK POL-5.B.2.
- Discrimination breaks the marginal productivity prediction that wages equal the value of a worker's marginal product, since equally productive workers end up with unequal pay.
- When an exam question says workers have equal education and experience but still earn different wages, discrimination is the factor that most directly explains the gap.
- Discrimination affects wealth as well as income, because lower earnings reduce saving, inheritance, and access to financial markets over generations.
- Don't confuse labor-market discrimination with price discrimination, which is a Unit 4 monopoly strategy for capturing consumer surplus, not a source of inequality in Topic 6.5.

## FAQs

### What is discrimination in AP Microeconomics?

It's the unfair treatment of workers based on characteristics like race, gender, or ethnicity, which limits their economic opportunities. The CED lists it in EK POL-5.B.2 as one source of income and wealth inequality in Topic 6.5.

### Is discrimination the same as price discrimination on the AP exam?

No. Labor-market discrimination is unfair treatment of workers and belongs in Topic 6.5 on inequality. Price discrimination is a Unit 4 monopoly strategy where a firm charges different prices to different buyers, and perfect price discrimination eliminates consumer surplus entirely.

### How does discrimination cause income inequality?

It pays equally productive workers different wages, breaking the marginal productivity rule that each factor earns the value of its marginal product. Practice questions use the example of women earning 82 cents per dollar earned by men despite equal education and experience.

### Can a wage gap exist without discrimination?

Yes. Gaps can come from differences in human capital, mobility, bargaining power, inheritance, or tax structures, all listed in EK POL-5.B.2. Discrimination is the right answer only when the question rules out those other explanations, like saying education and experience are equal.

### Do I need to calculate anything for discrimination or inequality on the AP Micro exam?

No calculations are required. You need to identify discrimination as a source of inequality and interpret measures like the Lorenz curve and Gini coefficient. Drawing Lorenz curves and calculating Gini coefficients are explicitly excluded from the exam.

## Related Study Guides

- [6.5 Inequality](/ap-micro/unit-6/inequality/study-guide/rmL71WEQFiM4gxDOnFca)

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