Table 15.5 shows information from the supply curve for labor for a monopsonist, that is, the wage rate required at each level of employment.
- What is the monopsonist’s marginal cost of labor at each level of employment?
- If each unit of labor’s marginal revenue product is $13, what is the firm’s profit maximizing level of employment and wage?
Explain in each of the following situations how market forces might give a business an incentive to act in a less discriminatory fashion.
- A local flower delivery business run by a bigoted white owner notices that many of its local customers are black.
- An assembly line has traditionally only hired men, but it is having a hard time hiring sufficiently qualified workers.
- A biased owner of a firm that provides home health care services would like to pay lower wages to Hispanic workers than to other employees.
Does the earnings gap between the average wages of females and the average wages of males prove labor market discrimination? Why or why not?
If immigration is reduced, what is the impact on the wage for low-skilled labor? Explain.