SQ5_LaborMarketsAK

2 suppose susie owns a company that makes socks and

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Unformatted text preview: u think that students who graduate from UCSD learned more than students who graduate from SDSU (that is, they acquired more human capital), then the graduate from UCSD should earn more. Note also that if employers think that people who graduate from UCSD are smarter than people who graduate from SDSU (even controlling for major and GPA), then statistical discrimination may lead employers to pay UCSD graduates more than SDSU graduates. 2. Suppose Susie owns a company that makes socks and that she hires workers in a competitive labor market to sew socks. The fabric required to make each pair of socks costs $1. The comp...
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