There are two employers in Bucolic that hire people who do not have a high school degree: a grocery store and a hardware store. The grocery store pays $10 per hour and the hardware store pays $12 per hour. People who work at either store can work as many hours as they want at those wages. Assume that it takes two hours to interview for a job. Lee works at the grocery store, but would like to work at the hardware store. If Lee interviews at the hardware store, there is a 10 percent probability of being hired. Assume that Lee is risk-neutral. What is Lee's expected hourly benefit from interviewing at the hardware store?
A. $2
B. $0.12
C. $12
D. $0.20
Answer: D
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Answer the following statement(s) true (T) or false (F)
1. If a consumer demands the same (positive) amount of a good no matter what their income, then the income elasticity is also positive. 2. Normal goods have income elasticities greater than 1, while inferior goods have income elasticities less 3. Estimates of the price elasticity of demand depend, in part, on the units used to measure price and 4. The cross elasticity of demand will be positive when goods are substitutes and negative when goods are complements.
According to the 1974 Constitution of the former Yugoslavia, nobody in Yugoslavia owns resources. Being a socialist country, the constitution claimed resources were owned by "society" as a whole. According to the economic way of thinking,
A) their economic problem would be solved. B) resources would finally be used efficiently, because the profit motive would be destroyed. C) people would use Yugoslavia's resources wastefully because they themselves wouldn't have to pay the opportunity cost. D) the central planners would know how to calculate the true values and costs of resource use.
Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The ________ of a football is ________
A) relative price; 2 basketballs per football B) relative price; 1/2 basketball per football C) opportunity cost; $20.00 D) opportunity cost; $10.00
The best practices frontier is similar in construction and meaning to the
A) the cost frontier. B) the absolute advantage frontier. C) production possibilities frontier. D) the supply and demand diagram.