5. A firm can produce output using either male or female workers. Suppose that the market...

 

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5. A firm can produce output using either male or female workers. Suppose that the market wage for male workers is WM = 10 and for female workers it is WF = 5. The price of output is equal to one. The firm has the production technology: Q: 100 x LM+LF, where LM (LF) is the number of male (female) workers employed. = (a) In a diagram, draw the isoquants that are associated with this production tech- nology. Which type of worker will a firm hire if firms do not discriminate? How many workers will be hired? And what are the profits of the firm? (b) Suppose that firms are prejudiced against female workers. The extent of dis- crimination can be summarized by the discrimination coefficient, d. What type of workers will firms hire, and how many will be hired if: i) d = 0.2; ii) d = 1.2; iii) d = 1.5. How do your answers compare to what you obtained in (a)? 5. A firm can produce output using either male or female workers. Suppose that the market wage for male workers is WM = 10 and for female workers it is WF = 5. The price of output is equal to one. The firm has the production technology: Q: 100 x LM+LF, where LM (LF) is the number of male (female) workers employed. = (a) In a diagram, draw the isoquants that are associated with this production tech- nology. Which type of worker will a firm hire if firms do not discriminate? How many workers will be hired? And what are the profits of the firm? (b) Suppose that firms are prejudiced against female workers. The extent of dis- crimination can be summarized by the discrimination coefficient, d. What type of workers will firms hire, and how many will be hired if: i) d = 0.2; ii) d = 1.2; iii) d = 1.5. How do your answers compare to what you obtained in (a)?

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