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Firms are looking to hire employees but cannot discern between skilled or unskilled employees. Skilled are worth $100,000 to the firm and unskilled are worth
Firms are looking to hire employees but cannot discern between skilled or unskilled employees. Skilled are worth $100,000 to the firm and unskilled are worth $30,000. The reservation price for skilled is $70,000 and $20,000 for unskilled. There is a 50% chance that an employee is skilled. Which workers will be hired and how much will they make?
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