**Title: Understanding Worker Types and Salary Dynamics in the Financial Industry**There are two types of workers in the financial industry: A (able) type and C (challenged) type. Potential employers in finance will pay $160,000 a year to a type A and $60,000 to a type C. Unfortunately, employers cannot observe the worker's type, while each worker knows his or her own type. However, market research informs all employers and workers that 60% of the population is type A and 40% is type C.**a) Pooling Salary Calculation**Assume that employers in finance treat every applicant as a random draw from the population and pay all the same salary. Then, the pooling salary is \_\_\_ (Hint: omit the thousands separator).**b) Impact of Alternative Employment Opportunities**Alternative employment opportunities outside of the financial industry yield the A types a salary of $125,000 and the C types a salary of $30,000. If the pooling salary in a) is offered to any applicant in finance, type \_\_\_ workers will leave the financial industry and only type \_\_\_ workers will stay in the industry. When this continues, the salary in finance will eventually reduce to \$\_\_\_ (Hint: omit the thousands separator).

The objective of the question is to calculate the pooling salary in the financial industry and to determine which type of workers will stay in the industry if the pooling salary is offered.First, we need to calculate the pooling salary. The pooling salary is the weighted average of the salaries of type A and type C workers, with the weights being the proportion of each type in the population. So, the pooling salary is (0.6 * $160,000) + (0.4 * $60,000) = $96,000 + $24,000 = $120,000.Next, we need to determine which type of workers will stay in the financial industry if the pooling salary is offered. If the pooling salary is less than the alternative salary outside the financial industry, the worker will leave the industry. So, type A workers will leave the industry if $120,000 < $125,000, which is true. Therefore, only type C workers will stay in the industry.Finally, if only type C workers stay in the industry, the salary in finance will eventually reduce to the salary of type C workers, which is $60,000.The pooling salary in the financial industry is $120,000. If this salary is offered, type A workers will leave the industry and only type C workers will stay. As a result, the salary in finance will eventually reduce to $60,000.