Suppose 10 of all workers are of high ability if a firm

Reference no: EM13379466

Suppose 10% of all workers are of high ability. If a firm knows a worker's ability, workers of low ability are paid $20,000 and workers of high ability are paid $30,000. Obtaining a university degree can signal high ability, and the cost of degree is $c.

a.) Under a pooling equilibrium, how much would a worker with degree be paid? How much would a worker without degree be paid?

b.) Under a separating equilibrium, how much would a worker with degree be paid? How much would a worker without degree be paid?

c.) What values of c would make a separating equilibrium possible?

Reference no: EM13379466

Questions Cloud

An economy consists of two regions the north and the south : an economy consists of two regions the north and the south. the labor market is initially in an economy-wide

In a paticular industry labor supply is es10w and labor : in a paticular industry labor supply is es10w and labor demand is ep70-3w where e is the level of employment and w is

According to the american metal markets magazine the spot : according to the american metal markets magazine the spot market price of u.s. hot rolled steel recently reached 580

A lisa consumes only pizzas p and burritos b her utility : a. lisa consumes only pizzas p and burritos b. her utility function is up0.5 b0.5. the price per pizza is 10 and the

Suppose 10 of all workers are of high ability if a firm : suppose 10 of all workers are of high ability. if a firm knows a workers ability workers of low ability are paid 20000

Kermit is considering purchasing a new computer system the : kermit is considering purchasing a new computer system. the purchase price is 100000. kermit will borrow one-fourth of

Hebron and stack discuss the fragmentation of nations - the : hebron and stack discuss the fragmentation of nations - the rise of smaller units within a nation. while this is

Suppose your friend macklemore derives utility only from : suppose your friend macklemore derives utility only from purchasing clothing and food. his utility curve is given

In our look at democracy and sovereignty one of the things : in our look at democracy and sovereignty one of the things that we observed is that we are seeing a rise of subnational

User Account

All Pages