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

question 14

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 $2, and low-productivity workers think it is as bad as a wage cut of $4.

• A)There is a separating equilibrium in which high-productivity workers take the course and are paid $18 and low-productivity workers do not take the course and are paid $10.
• B)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.
• C)There is no separating equilibrium and no pooling equilibrium.
• 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.

Recognize the impact of production level changes on costs and cost behavior.

Prepare and differentiate between traditional and contribution format income statements.

Comprehend the ethical considerations in financial reporting.

Understand the concept of relevant costs for decision-making.

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Definitions:

Low-Level Managers

Managers who operate at the lower tier of an organizational hierarchy, typically overseeing the direct performance of entry-level employees.

Organized Crime

Crime carried out by structured groups primarily engaged in illegal activities for profit.

Occupational Related

Pertaining to or connected with one's job or profession, especially in relation to health, safety, and well-being.

Respectable, Upper-Class

Pertains to individuals or groups considered high in social status, often admired for their wealth, education, or manners.