A necessary condition for a separating equilibrium when workers can use education as a signal of their ability is
A) the high-ability wage is larger than the sum of the degree cost plus the low-ability wage.
B) the cost of a degree is larger than the low-skill wage.
C) the high-ability wage is smaller than the low-ability wage.
D) the high-skill wage is equal to the cost of a degree.
A
You might also like to view...
When economists say that the demand for labor is a derived demand, they mean that it is
A. related to the demand for the product or service labor is producing. B. based on the assumption that workers are trying to maximize their money incomes. C. dependent on government expenditures for public goods and services. D. based on the desire of businesses to exploit labor by paying below equilibrium wage rates.
Refer to Figure 7.1. Start from initial equilibrium. If firms increase their capital stock, the new real wage could be ________ and the new amount of labor employed could be ________
A) X; A B) Z; A C) X; C D) Z; C
Refer to the information above. If an economy has a real GDP doubling-time of 48 years, this can be reduced to 30 years if annual GDP growth is raised by ________ percentage points
A) 4 B) 2.4 C) 1.6 D) 0.9
Refer to Scenario 5.2. Samantha's expected expense for her car is
A) $20,000. B) $19,000. C) $18,000. D) $17,500. E) $15,000.