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.

---

Definitions:

Business Plan

A detailed document outlining the strategy, objectives, market analysis, financial forecasts, and operational structures for a new or existing business.

Collateral

Assets that are pledged as security for repayment of a loan, forfeited in case of a default.

Elevator Pitch

A succinct and persuasive sales pitch that is intended to spark interest in a product, service, or project within the time span of an elevator ride.

Spiral Bound

A type of binding for books or documents where pages are fastened along one edge by a spiral of wire or plastic that loops through holes.