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Posted: March 2nd, 2020
Discrimination Assignment | Homework For You
1. Suppose there are a selection of utterly aggressive companies producing widgets, and each company has a producing function given by, the place Ew and Eb are the number of whites and blacks employed by the company respectively. It might be confirmed that the marginal product of labor is then. Suppose the market wage for black workers is $10, the market wage for whites is $20, and the value of each widget is $100.
a. Company A would not discriminate. What variety of workers of each race would Company A hire? How so much income does this non-discriminatory company earn if there are no totally different costs?
b. Company B discriminates in direction of blacks with a discrimination coefficient of .25. What variety of workers of each race does this company hire? How so much income does it earn?
c. Company C has a discrimination coefficient equal to 1.25. What variety of workers of each race does this company hire? How so much income does it earn?
d. What kind of discrimination are Corporations B and C exercising?
i. Type-based discrimination
ii. Statistical discrimination
iii. Every taste-based and statistical discrimination
iv. Cannot be determined
e. Ponder a laws that requires any given company to pay its black workers the an identical wage as its white workers? How environment friendly would this racial wage or employment gap on this model?
f. Suppose entrepreneurs can start new widget-producing companies using the an identical manufacturing function as present companies. Moreover assume companies ought to shut down within the occasion that they make antagonistic earnings. Throughout the model above, how might free entry/exit in and out of the widget market help reduce the racial wage and employment gap over the long term? Economics homework help
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