Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. A firm can produce output using either male or female workers. Suppose that the market wage for male workers is WM = 10

image  

5. A firm can produce output using either male or female workers. Suppose that the market wage for male workers is WM = 10 and for female workers it is WF = 5. The price of output is equal to one. The firm has the production technology: Q: 100 x LM+LF, where LM (LF) is the number of male (female) workers employed. = (a) In a diagram, draw the isoquants that are associated with this production tech- nology. Which type of worker will a firm hire if firms do not discriminate? How many workers will be hired? And what are the profits of the firm? (b) Suppose that firms are prejudiced against female workers. The extent of dis- crimination can be summarized by the discrimination coefficient, d. What type of workers will firms hire, and how many will be hired if: i) d = 0.2; ii) d = 1.2; iii) d = 1.5. How do your answers compare to what you obtained in (a)?

Step by Step Solution

3.54 Rating (157 Votes )

There are 3 Steps involved in it

Step: 1

a The isoquants associated with this production technology are circular with the production function being Q 100sqrtLM LF To draw the isoquants Fix a ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Labor Economics

Authors: George J. Borjas

6th edition

73523208, 2900073523209 , 978-0073523200

More Books

Students also viewed these Economics questions

Question

differentiate between good and bad ways of working hard;

Answered: 1 week ago