Asked by Grace Hummel on Apr 28, 2024

verifed

Verified

Suppose the market wage rate for whites is $18 an hour and the monetary value a prejudiced employer attaches to the disutility of hiring African Americans is $3. This employer will be indifferent between hiring African Americans and whites only when the African-American wage rate is

A) $3.
B) $12.
C) $15.
D) $21.

Prejudiced Employer

An employer that treats potential or current workers unfairly based on personal prejudices that have nothing to do with how well they perform their jobs.

Wage Rate

the amount of money paid to an employee per unit of time (e.g., hourly, weekly) for their labor.

Disutility

Disutility refers to the dissatisfaction or disappointment that consumers experience from a particular good or service.

  • Evaluate the impact of discrimination on wages and employment in labor markets.
verifed

Verified Answer

TH
Tanner HearneMay 01, 2024
Final Answer :
C
Explanation :
The employer values the disutility of hiring African Americans at $3. Therefore, to be indifferent between hiring an African American and a white worker, the wage rate for African Americans must be $3 less than that for whites, making it $15 ($18 - $3).