Exercise 3 Education as a Signal-=$10y; forFor workers in Group H (high-skill workers), the cost of attaining an educational level y is CH(y)workers in Group L (low-skill workers), the cost of attaining an educational level y is CL (y) = $15y.Employees will be offered $60 if they have y ≥ y*, where y" is an educational threshold determined by the employer.They will be offered $20 if they have y < y*.a) Find if in equilibrium, education can be used as a market signal of the worker's skill.b) Find the range for which education can be used as a market signal of the worker's skill (the solution is arange such as 5 ≥ y* > 1)

Signaling theory, as first introduced by economist Michael Spence in 1973, focuses on how…

Answered: Exercise 3 Education as a Signal - =…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 11P

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Workers come in many different types, or productivities. The productivity of a worker is given by O where 0 is distributed uniformly on the interval 0 < 0 < 2. When a firm hires a worker with productivity 0, the firm can produce 0 units of output and earn pe in revenue, where p < 2. Each worker can choose to work for the company, or can seek employment elsewhere that gives the worker a wage 03. (a) If the firm pays a wage w, which types of workers want to work for the firm? (b) What is the average output of the workers hired by the firm and what is the average output of those who don't work for it? (c) If the firm is a monopsony purchaser of labour, what wage would it set to maximise its profits. What is the employment level? (d) If the firm is in a perfectly competitive industry what will the wage be? (e) An educational establishment opens up. It will test the workers for free and only workers with 0 2 1 pass the test. The company decides to offer a different wage to workers who pass…
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There are 50 workers in the economy in which all workers must choose to work a safe or a risky job. When it comes to accepting a risky job, Worker 1’s reservation price is $5; worker 2’s reservation price is $6, worker 3's reservation wage is $7, and so on. Assume there are exactly 12 risky jobs. (a) What is the equilibrium wage differential between safe and risky jobs? Which workers will be employed at the risky firm? (b) Suppose now that an advertising campaign, paid for by the employers who offer risky jobs, stresses the excitement associated with “the thrill of injury,” and this campaign changes the attitudes of the work force toward being employed in a risky job. Worker 1 now has a reservation price of $1, worker 2’s reservation price is $2, and so on. There are still only 12 risky jobs. What is the new equilibrium wage differential? c) What is the maximum the firm should be willing to pay for its ad campaign?
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Pls help with below homework. Why do social workers care about stringency of eligability? What sorts of things does stringency of eligibility refer to?
QUESTION 16 Suppose workers can be divided into two groups: high and low skill workers. Let y be the number of years of college education of a worker. For workers in Group A (high skill workers) the cost of attaining an educational level y is CÃ(y)=$25y; for workers in Group B (low skill workers) the cost of attaining an educational level y is CB(y)=$65y. Employees will be offered $410 if they have y ≥ y*, where y* is an educational threshold determined by the employer. They will be offered $50 if they have y y* z
Ispart B D b) Which wage rate should the employer offer? Why? D 10 20 30 60 70 a) Which point is the most desirable one for the employer? Is it also attainable? Best Response •Isacast Wage Rate c) For which wage rates would the employee turn down a job offer? do1-7 19:2 91 6fc3.jp
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