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A Firm Hires Two Kinds of Workers, Alphas and Betas

question 5

Multiple Choice

A firm hires two kinds of workers, alphas and betas. The population at large has equal number of alphas and betas. One can't tell a beta from an alpha by looking at her, but an alpha will produce $3,000 worth of output per month and a beta will produce $2,500 worth of output in a month. The firm decides to distinguish alphas from betas by having workers take an examination. A worker will be paid $3,000 if she gets at least 60 answers right and $2,500 otherwise. For each question that they get right on the exam, alphas have to spend hour studying and betas have to spend 1 hour. For either type, an hour's studying is as bad as giving up $20 of income per month. This scheme leads to

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Definitions:

Substitute Mothers

Individuals or entities that provide maternal care and nurturing in the absence or inadequacy of a child's biological mother.

Unfamiliar Caregiver

A person who provides care or assistance to someone but is not known previously by the individual receiving care, often leading to adjustments in behavior or attachment.

Reciprocal Relationship

A mutual or two-sided relationship where both parties benefit, contribute, or are influenced by each other.

Psychological State

The mental condition of a person at a given time, encompassing emotions, thoughts, attitudes, and feelings.