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.

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Definitions:

Cultural Norms

Shared expectations and rules that guide behavior of people within social groups, influencing their actions and interactions.

Error Of Omission

A mistake resulting from failing to perform an action or include necessary information.

Racial And Ethnic Differences

Variations in experiences, opportunities, and interactions based on racial or ethnic identities, impacting social, economic, and health outcomes.

Unconscious Racism

A form of racism that is not overt or deliberate but is rooted in unconscious biases and stereotypes.