Suppose that an employer can hire workers with brown hair and workers with blonde hair. Each type of worker has the same productivity. Which of the following is correct if the employer discriminates by hiring only workers with brown hair?
A)The employer will be just as efficient as a nondiscriminating employer.
B)The employer will face higher costs than firms that focus only on maximizing profits.
C)The employer will immediately go out of business because discrimination is illegal.
D)The employer will face union strikes.

Question

Quizplus · Accepted Answer

By discriminating based on hair color, the employer is limiting the pool of available workers and potentially missing out on highly skilled and qualified individuals who happen to have blonde hair. This reduces productivity and increases costs for the firm. In the long run, firms that discriminate are likely to face increased competition and may struggle to survive in the marketplace. However, discrimination is not illegal in all circumstances, and there is no mention of unions in the scenario.

Suppose That an Employer Can Hire Workers with Brown Hair