Suppose That Low-Productivity Workers All Have Marginal Products of 10

question 1

Multiple Choice

Suppose that low-productivity workers all have marginal products of 10 and high-productivity workers have marginal products of 16.The community has equal numbers of each type of worker.The local community college offers a course in microeconomics.High-productivity workers think taking this course is as bad as a cut in wages of $4 and low-productivity workers think it is as bad as a wage cut of $8.

• A)There is a separating equilibrium in which high-productivity workers take the course and are paid $16 and low-productivity workers do not take the course and are paid $10.
• B)There is no separating equilibrium and no pooling equilibrium.
• C)There is no separating equilibrium, but there is a pooling equilibrium in which everybody is paid $13.
• D)There is a separating equilibrium in which high-productivity workers take the course and are paid $20 and low-productivity workers do not take the course and are paid $10.
• E)There is a separating equilibrium in which high-productivity workers take the course and are paid $16 and low-productivity workers are paid $13.

---

Definitions:

Basketball Player

An athlete who participates in basketball, a team sport involving shooting a ball through an opponent's hoop to score points.

Juicy

Juicy refers to something that is full of juice or moisture, often used to describe flavorful and succulent fruits or stories that are especially interesting and scandalous.

Barbecue

A cooking method involving grilling, smoking, or roasting meats and vegetables, especially outdoors, and often accompanied by a distinctive sauce.

Oppressively Hot

Describes extreme heat that feels uncomfortable or unbearable.