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2. A firm cannot distinguish between two types of workers, high-skill ones who produce $50,000 annually and low-skill ones who produce $40,000. They know one
2. A firm cannot distinguish between two types of workers, "high-skill" ones who produce $50,000 annually and "low-skill" ones who produce $40,000. They know one difference: each hour of overtime causes disutility worth $10 to the high-skill workers and worth $20 to the low- skill workers. How many hours of (unpaid, unproductive) overtime could they require as a "signal" of the worker's quality?
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