In the Standard Becker Model of Discrimination, Each Firm Is

question 7

Multiple Choice

In the standard Becker model of discrimination, each firm is associated with a discrimination coefficient of d > 0 and acts as if the wage paid to blacks is w_B(1 + d) where w_B is the actual hourly wage paid to blacks. Assume whites and blacks are equally productive. The going wage for whites is $16 per hour while the going wage for blacks is $10 per hour. Which of the following will characterize the labor market equilibrium when some employers have discriminatory preferences against hiring black workers?

• A) All discriminating employers will hire only white workers.
• B) All firms will earn the same amount of profit regardless of their discriminatory preferences.
• C) An employer with a discrimination coefficient of 0.8 will hire only white workers.
• D) An employer with a discrimination coefficient of 2.2 will hire only black workers.
• E) Any employer with a positive discrimination coefficient will hire only white workers.

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Definitions:

Chief Financial Officer

A senior executive responsible for managing the financial actions of a company, overseeing financial planning, risk management, and financial reporting.

Corporate Controller

A senior executive who oversees the accounting and financial reporting functions within a company, ensuring accuracy and compliance with regulations.

Financial Decision Making

The process of making choices relating to investments, budgeting, savings, and spending with the aim of optimizing financial goals.

Treasurer

The executive in charge of external financing in most companies. The treasurer generally reports to the CFO.