Suppose Workers with a College Degree Are Paid a Lifetime

question 6

Multiple Choice

Suppose workers with a college degree are paid a lifetime income of $500,000 and workers without a college degree are paid $300,000. The cost of obtaining a college degree for high-productivity workers is $100,000. For a college degree to serve as a useful productivity signal, the cost of a college degree for low-productivity workers must be:

• A) greater than $200,000.
• B) less than $200,000.
• C) greater than $100,000.
• D) less than $100,000.

---

Definitions:

Closing Sales

The final step in the sales process where agreements are finalized, and transactions are completed, securing the purchase.

Limited Warranty

A warranty that is restricted to certain parts, certain defects, or has a specified time limit.

Continuous-yes Close

The continuous-yes close is a sales technique where the salesperson asks a series of questions designed to elicit affirmative answers, leading to a positive response on the sale.

Labor Coverage

An insurance or warranty term that covers the cost of labor in the repair or replacement of covered items.