Part A B and C urgently need a) Draw the wage schedule with y on the x-axis and w(y) on the y-axis. Make sure to label everythingb) What amounts of schooling y will Type 1 workers consider getting? What about Type 2 workers? Dothese workers have to think of schooling as a form of signalling for schooling to act as a signal?c) What is the schooling schedule facing each of Type 1 and Type 2 workers? (Hint: for each type this is aconditional function, similar to the wage schedule above). Show the general functional considerationsand then plug in the values and solve for specific conditionsd) Draw a new graph showing the wage schedule and the cost functions for both types. Clearly indicatethe payoff for each type of worker given their choices and y*e) This setup allows for many signalling equilibria. How many? What are the specific conditions andresults that support these equilibria?f) Is there an equilibrium supported by this setup (something that could happen given this setup, andwhich would be sustained as an equilibrium) such that both types of worker would prefer an equilib-rium with no signalling at all (if the employer's beliefs supported it? If so, what is it? Exercises (ensure you show all your work):1) Consider the Spence (1973) signalling model. Assume schooling has no impact on productivity. Supposethere is a single employer and two distinct skill/productivity groups (1 and 2), with group productivity andproportions of the population as shown in Table 1, below. These groups can acquire some amount of school-ing y at the costs shown in Table 1.Suppose further that the employer believes there is some level of schooling, y", such that if a worker hasy < y* then that worker's marginal product is 1 with probability 1, and if y 2 y* then that worker's marginalproduct is 2 with probability 1. Suppose the employer offers a wage schedule:1 if yy*w(y) =Table 1Simple signalling model setupGroupMarginal ProductProportion of populationCost of y9121-91у/2

Name: Part A B and C urgently need a) Draw the wage schedule with y on the x
Uploaded: 2024-03-20T07:07:37.000Z
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Description: Part A B and C urgently need a) Draw the wage schedule with y on the x-axis and w(y) on the y-axis. Make sure to label everythingb) What amounts of schooling y will Type 1 workers consider getting? What about Type 2 workers? Dothese workers have to t