2) (5 points) Equilibrium discrimination and crowding. Suppose there are two occ

Question

2) (5 points) Equilibrium discrimination and crowding. Suppose there are two occupations, economists and psychologists.

a) (2 points) Draw hypothetical supply and demand graphs for men and women to both occupations assuming that some of each gender prefers each job. Now, assume that discriminatory actions take place preventing men from becoming psychologists. Show the effects of discrimination on your graph.

b) (2 points) Who benefits and who loses from this discrimination? Show the effect of discrimination on wages and employment in both occupations and on total output in each. (Hint: have one graph for economists, and a separate one for psychologists.)

c) (1 point) Are there circumstances where the government should not prevent discrimination?

Explanation / Answer

b. Women economists are the winners because there is less employments but higher wages because men can’t be economists, and the losers are both men and women psychologists because there is a higher employment and a lower wage.

c.There should be no circumstances where discrimination is allowed because, for example, discrimination against women in access to some occupations and trades crowds them into care occupations and home production, increasing the supply of women to those occupations even while low wages drives men out.

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