Scenario 3: Consider a labor market with two types of workers (i.e. suppliers of labor): There are 1,000 high-ability workers who are willing to work in this market for a salary of $50,000/year (and who would otherwise engage in other activities - e.g. leisure - outside of this market). There are also 1,000 medium- ability workers who are willing to work in this market for a salary of $30,000/year. There are many firms (i.e. buyers of labor) who are willing to pay $55,000/year for high-ability workers and $35,000 for medium-ability workers.

Refer to Scenario 3. Suppose that worker ability is known to each worker themselves, but not to firms. In that case: a) Two markets will emerge: In the high-ability worker market, all 1,000 high-ability workers will find employment at a $55,000/year salary; and in the medium-ability market, all 1,000 medium-ability workers will find employment at a $35,000/year. b) One market will emerge, in which all 2,000 workers (of high and medium ability) will find employment at a $45,000/year salary. c) One market will emerge, in which all 1,000 medium-ability workers will find employment, at a $45,000/year salary; while high-ability workers pursue other activities outside of the market. d) One market will emerge, in which all 1,000 medium-ability workers will a job, at a $35,000/year salary; while high- ability workers pursue other activities outside of the market.