Suppose All Workers in a Certain Labor Market Are of Either

question 48

Multiple Choice

Suppose all workers in a certain labor market are of either high quality or low quality.Potential employers value a high-quality worker at $15,000 per month and a low-quality worker at $7,500 per month.The monthly supply of high-quality workers is Q^s_H = 0.04(W - 1,500) and the supply of low-quality workers is Q^s_L = 0.08(W - 1,500) ,where W is the monthly wage.If workers' abilities are not observable to employers,what is the deadweight loss due to asymmetric information?

• A) $750,000
• B) $1,500,000
• C) $1,125,000
• D) $500,000

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Definitions:

Competitors' Benefits

Advantages or valuable aspects that competitors offer, potentially attracting customers away from one's own business.

Student-centered Faculty

An educational approach where teaching strategies are designed to meet the needs, interests, and abilities of students.

High-quality Education

An educational system or program that provides superior learning experiences, leading to enhanced student outcomes, including knowledge, skills, and values.

Positioning

The strategy of creating a distinct image and identity for a product or brand in the minds of the target market, distinguishing it from competitors.