Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 3

In Becker's taste for discrimination model, what is the meaning of the discrimination coefficient d If the monetary value of d is, say, $6 for a given white employer, will that employer hire African-American or white workers if their actual wage rates are $16 and $20, respectively Explain. In Becker's model, what effect would a decrease in the supply of African-American labor have on the African- American to white wage ratio and the employment of African-American workers Use the model to explain the economic effects of an increase in employer prejudice. What are the basic public policy implications of this model