Suppose the owners of Firm A and Firm B hire only women because: W(1 + da) < Wmand WF(1 + d3) < WM- If the discrimination coefficient is higher for Firm A than Firm B (da > d3), then which firm will earn higher profits? A. Firm A will earn higher profits. B. Firm B will earn higher profits. C. Both firms will earn the same profits.
Suppose the owners of Firm A and Firm B hire only women because: W(1 + da) < Wmand WF(1 + d3) < WM- If the discrimination coefficient is higher for Firm A than Firm B (da > d3), then which firm will earn higher profits? A. Firm A will earn higher profits. B. Firm B will earn higher profits. C. Both firms will earn the same profits.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In a labor market, discrimination is a situation in which equally productive workers are treated unequally based on observable characteristics. Discrimination can be based on the worker's gender, age, race, or religion. Firms may discriminate on the basis of gender and want to hire more male workers than female workers as they might think that male workers are productive, and vice versa. There are also differences in wages for both male and female workers.
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