Suppose That in Enigma, Ohio, Klutzes Have a Productivity of $1,000

question 14

Multiple Choice

Suppose that in Enigma, Ohio, klutzes have a productivity of $1,000 and kandos have a productivity of $5,000 per month. You can't tell klutzes from kandos by looking at them or asking them, and it is too expensive to monitor individual productivity. Kandos, however, have more patience than klutzes. Listening to an hour of dull lectures is as bad as losing $150 for a klutz and $50 for a kando. There will be a separating equilibrium in which anybody who attends a course of H hours of lectures is paid $5,000 per month and anybody who does not is paid $1,000 per month

• A) if 26.67 < H < 80.
• B) if 26.67 < H < 160.
• C) only in the limit as H approaches infinity.
• D) for all positive values of H.
• E) if 23.33 < H < 70.

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Definitions:

Writ of Certiorari

An order by a higher court to a lower court to send up the records of a case for review, typically used by the Supreme Court to select cases it will hear.

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