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

question 3

Multiple Choice

Suppose that low-productivity workers all have marginal products of 10 and high-productivity workers all 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 wage cut of $3, and low-productivity workers think it is as bad as a wage cut of $5.

• A)There is a separating equilibrium in which high-productivity workers take the course and are paid $19 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 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.
• D)There is no separating equilibrium, but there is a pooling equilibrium in which everybody is paid $13.
• 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:

Automatic Processes

Cognitive functions that occur without conscious awareness, often quickly, and with minimal effort.

Thought System

A coherent collection of beliefs and attitudes that shapes an individual's perception and thinking.

Symbolic Consciousness

Refers to the ability of humans to use symbols, such as language and other cultural products, to represent and understand reality.

Organisms

Living beings that can function independently, including animals, plants, bacteria, and fungi.