Let's assume the firm's production function is given by: Q = 10(Ew + EB) and their marginal product is: MPE = (Ew + EB) Let's also assume the wage for the black worker is $10 and the wage for the white worker is $20. Each unit can be sold for $100. Assume both workers are equally productive. (a) How many workers would Firm A hire if they were colorblind? What profit do they make? (b) How many workers would Firm B hire if they had a discrimination coefficient of 0.25 towards black workers? What profit do they make? (c) How many workers would Firm C hire if they had a discrimination coefficient of 1.25 towards black workers? What profit do they make?

Let's assume the firm's production function is given by: Q = 10(Ew + EB) and their marginal product is: MPE = (Ew + EB) Let's also assume the wage for the black worker is $10 and the wage for the white worker is $20. Each unit can be sold for $100. Assume both workers are equally productive. (a) How many workers would Firm A hire if they were colorblind? What profit do they make? (b) How many workers would Firm B hire if they had a discrimination coefficient of 0.25 towards black workers? What profit do they make? (c) How many workers would Firm C hire if they had a discrimination coefficient of 1.25 towards black workers? What profit do they make?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

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