3.In the Beckermodel of labor markets, some people/firms have a "taste for discrimination"between 2 groups of people,W and B. There are 9 times more W than B.

a.Supposedifferent people/firms have different levels of "tastefor discrimination". Discuss the consequences for members of W and B when all members of W and B have the same VMP. (8marks)

b.Suppose that the VMP of W and B labor are normally distributed with the same mean and standard deviation.Due to the discrimination factor, d, being greater than 0, the wage rate to W is greater than the wage rate to B.The VMP of the average team member determines the profit of each firm.All firms have an equal and fixed number of members on the team.Discuss how market competitioninfluences the distribution of W and B labor where people/firms exhibit different "tastes" for discrimination. (12marks)

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