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

question 11

Multiple Choice

Suppose that low-productivity workers all have marginal products of 10 and high-productivity workers all have marginal products of 15.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 $15 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 $12.50.
• D)There is a separating equilibrium in which high-productivity workers take the course and are paid $17 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 $15 and low-productivity workers are paid $12.50.

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Hidden or kept secret from view.

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A bankruptcy plan allowing individuals earning regular income to develop a plan to repay all or part of their debts within a specified timeframe.