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

question 23

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,

• A) the high-skill workers' wage is larger than the low-skill workers' wage.
• B) the low-skill workers' wage is zero.
• C) the high- and low-skill workers receive the same wage.
• D) the high-skill workers' wage is equal to the low-skill workers' wage plus the cost of obtaining a degree.

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Definitions:

Humanity

The quality or condition of being human, often associated with compassion, empathy, and the collective human species.

Prima Facie Duty

Moral duty that is binding unless overridden by a more compelling moral duty.

Moral Requirement

An ethical obligation or duty that individuals are expected to follow based on moral principles or societal norms.

General Happiness

A state of overall well-being and contentment, often considered as a goal of human life.