Review Questions

1.
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Define discrimination. What is meant by equal material productivity?
2.
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What is the key distinction between premarket and market discrimination? Give examples of each of these practices.
3.
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Outline the principal features of the evidence that relates to the economic differences of alternative worker groups in the United States, classified by their race, gender, and ethnicity.
4.
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Explain what is meant by the coefficient of employment discrimination, δe. Suppose that a particular employer's coefficient of discrimination is δe = 9. What is the effective cost to this firm of spending an additional $1 on minority workers?
5.
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Suppose that a White consumer's coefficient of discrimination is δc = 1. If she is willing to pay at most p = $20 for the products produced by White workers, how much would she be willing to pay for otherwise identical products produced by Black workers?

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