Suppose that an employer can hire workers with straight hair and workers with curly hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with straight hair?

Question

Quizplus · Accepted Answer

By discriminating and not hiring equally productive workers with curly hair, the employer limits the pool of potential employees, potentially leading to higher wages for the smaller group of acceptable workers and thus higher costs compared to firms that hire solely based on productivity. Discrimination does not necessarily lead to immediate business failure or union strikes, and it does not guarantee inefficiency in terms of productivity, but it can lead to higher operational costs.

Suppose That an Employer Can Hire Workers with Straight Hair