In a Labor-Market Separating Equilibrium with High-Skill and Low-Skill Workers

question 99

Multiple Choice

In a labor-market separating equilibrium with high-skill and low-skill workers and where a costly educational degree is used solely as a signal device,we can say that

• A) education is socially inefficient because it is costly and provides no useful skills to the worker.
• B) education is socially efficient.
• C) education is privately inefficient for high-skill workers.
• D) education is privately useful for low-skill workers only.

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Definitions:

Cable TV Service

A system of delivering television programming to consumers via radio frequency signals transmitted through coaxial cables or digital light pulses.

Interdependent Firms

Companies whose operations and outcomes are mutually influenced, typically seen in competitive markets where the actions of one firm affect the sales and strategies of others.

Oligopoly

An industry with only a small number of producers.

Perfect Competition

A market structure characterized by a large number of small firms, homogeneous products, and no barriers to entry or exit, leading to optimal distribution of resources.