Question
Assume the MRPL for all workers is $8.00. There are two equally productive groups of workers: left-handed ones and right-handed ones. Some employers are prejudiced
Assume the MRPL for all workers is $8.00. There are two equally productive groups of workers: left-handed ones and right-handed ones. Some employers are prejudiced against lefthanded people. There are a bunch of firms all of whom are looking to hire one worker. Six firms do not care about the handedness of their workers. 1 firm has a coefficient of discrimination (d) of $1.00, another firm has a d=$2.00, another firm has a d=$3.00.....while the last firm has a d of $8.00.
a) Draw the demand curve for left-handed workers given this information.
b) The supply curve for left-handed workers is W=L. Add the supply curve to your graph. Given this information, how much will left-handed workers make?
c) If 2 of the firms with d=0 dropped out of the labor market, what would happen to the wages of left-handed workers? (You do not need to redraw the graph but you must explain if wages will go up, down, or be unchanged.) What would happen to the profits of the remaining firms with d=0? up, down, or unchanged? What would happen to the profits of a firm with d=6? up, down, or unchanged? -please explain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started