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

question 16

Multiple Choice

Suppose that low-productivity workers all have marginal products of 10 and high-productivity workers all have marginal products of 12.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 $5, and low-productivity workers think it is as bad as a wage cut of $9.

• A)There is no separating equilibrium, but there is a pooling equilibrium in which everybody is paid $11.
• B)There is a separating equilibrium in which high-productivity workers take the course and are paid $12 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 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 $12 and low-productivity workers are paid $11.

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Definitions:

Temporal Lobe

A region of the brain responsible for processing auditory information and encoding memory.

Sensory Registers

A short-term storage system for sensory information, where such information is held briefly before it's either discarded or processed further.

Capacity

The ability or potential an individual or entity has to perform, produce, or hold something.

Sensory Registers

Memory systems that hold sensory information for a very short period of time, allowing it to be processed further.