In a company, if high-ability workers get paid $80,000, while low-ability workers get paid $50,000, the education (MBA) that can qualify the workers as high-ability ones cost $20,000
What's the highest share of high-ability workers to get a separating equilibrium? A) 1/4
B) 1/3
C) 1/2
D) 1
B
You might also like to view...
Over the most recent movements from cyclical peak to trough, 1990: Q3 to 1991: Q2, gross private domestic investment ________ approximately ________ percent
A) fell, 40 B) rose, 5 C) fell, 11 D) rose, 22
An example of an essential facility is
A) the telephone line into your house. B) U.S. Route 66. C) the Golden Gate Bridge. D) your local pizza parlor.
At the time the government of Bulgrovia issued new bonds, they issued them at a price that reflected the risk-free rate because investors had no concerns regarding default risk, so did not require a risk premium. That risk-free rate was 4%. These bonds currently have one year to maturity and you notice the yield is 20%. Can you calculate the probability that the Bulgrovian government will default?
What will be an ideal response?
Suppose Mark invests a sum of $100,000 in a new venture. To fund his investment, Mark withdraws $50,000 from a savings account paying 10% per year and uses the proceeds from a bond that has just matured worth $50,000 . If he had reinvested the proceeds from the bond, he could have earned interest at the rate of 5%. Calculate the opportunity cost of capital for Mark in a particular year
a. $5,000 b. $7,500 c. $10,000 d. $12,500 e. $100,000