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

question 107

Multiple Choice

In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device,all else equal,an increase in the wage differential between high- and low-skill workers leads to

• A) an increase in the required minimum share of high-skill workers.
• B) a decrease in the required minimum share of high-skill workers.
• C) no change in the required minimum share of high-skill workers.
• D) None of the above answers are correct.

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Definitions:

Oxygenated Blood

Blood that is rich in oxygen, typically found in arteries, having been oxygenated in the lungs.

Deoxygenated Blood

Blood that has a reduced oxygen content after circulating through the body and is on its way back to the lungs for reoxygenation.

Arteries

Vessels carrying blood away from the heart.

Veins

Vessels that carry blood to the heart.