Question 7, Text Exercise 5.4 HW Score: 61.82%, 6.8 of 11 points Save Part 2 of 2 x Points: 0 of 1 Suppose that you are given wh, w, and 0 in the education signaling model. For what value of c are both a pooling equilibrium and a separating equilibrium possible? In this problem, w is the value of the output that a high-ability worker produces for a firm, w is the value of the output that a low-ability worker produces for a firm, 0 is the share of the workforce with high ability and (1 -0) is the share with low ability, and c is the cost of getting a degree in school for high-ability individuals. In this model, low-ability individuals cannot obtain a degree. Both a pooling equilibrium and a separating equilibrium are possible if the cost of signaling high-ability with a degree for high-ability individuals is c such that OA. Wh - W, > c> O( wh - wj ). OB. Wh - W >c > (1 -0)(w - w). OC. Wh > c >w. XD. Wh - W> c > (1 -0) (wh - w). *E. W - W > c> (1 -0)(w/ - wj). For what value of c will high-ability workers having higher net earnings in a separating equilibrium than in a pooling equilibrium? High-ability workers will have a higher net wage in the separating equilibrium than in the pooling equilibrium if OA. Wh - C > W. OB. W-C > Own + (1 -0) w,- O c. Wh - c Ow + (1 -0) w. OE. Wh - c > Wr + w