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

Answer rating: 100% (QA)

a Since the marginal revenue product of labor MRPL for all workers is 800 the demand curve for lefth... View the full answer