Explain why many models of discrimination result in the prediction of segregated workforces.
What will be an ideal response?
Suppose white and black workers have the same marginal product, but because of discrimination, black workers are paid less than their marginal product. If some employers wish to maximize profit, they will find it beneficial to hire the black workers, and this will continue until blacks are earning their full marginal product. Thus employers who practice discrimination at a cost will have only white workers, while all black workers will be employed by firms that do not practice discrimination. Alternatively, if employers do not discriminate but white workers have a distaste for associating with black workers, then whites would insist on higher wages if the workforce were integrated. Employers will thus benefit by using segregated workforces to avoid paying this premium to white workers.
You might also like to view...
Which of the following ideas reflect the Monetarist macroeconomic model?
i) The Monetarist model supports the Classical model, in general. ii) Decreases in the growth rate of the quantity of money trigger recessions. iii) Government intervention is an appropriate tool to steady the economy. A) i and ii B) ii and iii C) i only D) i, ii and iii E) i and iii
In the above figure, B is the current long-run aggregate supply curve and E is the current short-run aggregate supply curve. Technological advances mean the long-run aggregate supply curve and short-run aggregate supply curve
A) remain B and E. B) shift to A and D, respectively. C) shift to C and F, respectively. D) shift to C and remain E, respectively.
As output increases, the AVC
a. increases. b. decreases. c. remains the same. d. falls and then rises.
Costs that deter firms from changing prices in response to demand changes are known as
A) sticky costs. B) menu costs. C) policy costs. D) production costs.