2. In Becker\'s taste for discrimination model, what is the meaning of the discr

Question

2. 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, will that employer hire African-American workers or white workers if their wage rates ar $16 and $20 respectively? Explain. What effect would a decrease in in the supply of African American labor have on the African American to white wage ratio and employment of African Americans? Use the model to explain the economic effects of an increase in employer prejudice.

Explanation / Answer

There are two types of persons here one is African -American workers and white workers. The amount paid to these two kinds of persons also vary. If the employer hires the African American labor then they will offer $6. Suppose, If the employer hires the African Americans white workers then they will pay $16 to $20.

The workers are here in Black and white color people. African American labor is Black colored get low wages compared with African American white color persons.

Suppose, if the employer reduces the supply of African American labor(Black color persons) to get into the work then the production cost will increase by paying high wages. Once the production cost is increased then it impacts will show on the marginal cost and tax. Finally, the output of the product will be available at a high price.

So, if the employer looking for control of production cost then he/she should take African American labor(Black color persons) instead of to take African American workers or white workers.

In overall production, the marginal cost is the main important factor. Suppose, the employer requirements have high potentiality then he/she choose the effective persons like African American workers or white workers. In case, if the employer is capable then he/she choose the African American labor then the employer guides them all OR giving a good spoon feeding to all of them then employer get the good effective results within the low production cost.

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