Economics

Consider an economy that produces just one good called tires. Suppose that all firms produce
tires and to produce tires such firms have to hire workers. Let there be two types of firms called
“A”and “8″. Firms of type A refuse to hire women. Firms of type “B” are willing to hire either
men or women. Assume that all workers have identical skills at producing tires. Let there be
400 women and 400 men in this economy.

a. Create separate supply and demand graphs for male and female workers. 00 men or women earn higher wages in this economy?

b. Given your answer to “part a.”, will firm “8” mainly hire women?

c. 00 firms of type “A” or type “B” have a cost advantage in producing tires? What have you just learned about the economics of discrimination?

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