Figure 20.2 shows the market for lows killed workers. With on-the-job training, low-skilled workers can become high skilled workers. The value of marginal product of high-skilled workers at each employment level is twice the value of marginal product of low-skilled workers, but the cost of acquiring skill adds $2 an hour to the wage rate that will attract high skilled labor. What is the equilibrium wage rate of low-skilled labor and the number of low-skilled workers employed? What is the equilibrium wage rate of high skilled labor and the number of high skilled workers employed?

Transcribed Image Text:

FIGURE 20.2 Chapter Checkpoint Study Plan Problem 3 Wage rate (dollars per hour) 14-- 12- 10- 8. 6 4. 2 0 2 S D 10 6 8 Labor (thousands of hours)