As in the textbook example, assume there are two types of workers, low and high-ability, and let :9 = {125 be the proportion of higha bilit".r workers in the population. Assume their marginal productivity and, therefore, their wages are wk = 52-3 and w; = 516, and that both types can use college education to signal high ability. The cost of college education for low-ability workers is c; = $5 whereas the cost for highability workers is ch = $2. Questions 0? How much do rms pay to each worker type whe n they cannot differentiate them? [a]: W,1 = $20 and 1er = 516 [b] wh = $2 and W1 = 55 {c} E? = $17 {d} E? = $18 Questions Consider the wage for both types of workers and the highability workers' college cost, ch. For which values of I9 {the proportion of highability workers in the population] do the high-ability workers preferthe separating equilibrium over the pooling equilibrium? [3} Any 9 > 1/2 [b] Any 6