Suppose a Competitive Labor Market Is Populated by Equal Numbers

question 21

Multiple Choice

Suppose a competitive labor market is populated by equal numbers of high-ability (H) and low-ability (L) workers.Each-high ability worker produces output valued at $100 and each low-ability worker produces output valued at $20.In terms of time for their effort,it costs $50 for high-ability students to acquire a college degree while it costs low-ability students $85 to acquire a college degree.Firms will offer workers with college degrees ______ and workers without college degrees ______.

• A) $20;$100
• B) $150;$85
• C) $60;$60
• D) $100;$20
• E) $50;$20

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Definitions:

Decision Table

A tool used in both computing and decision analysis, indicating actions to be taken based on various conditions.

Conditional Value

The value of an asset, item, or scenario that depends on the fulfillment of certain conditions or the occurrence of specific events.

Historical Probability

The likelihood of an event occurring based on past data and trends.

Decision Trees

A graphical representation of possible solutions to a decision based on various conditions, often used in strategic planning and decision making.