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Suppose that as an employer. you face two types ofemployees.You're willingto pay $150,000 to high-skilled workers and $80,000 to low-skilled workers, but you can't directly
Suppose that as an employer. you face two types ofemployees.You're willingto pay $150,000 to high-skilled workers and $80,000 to low-skilled workers, but you can't directly observe any particulariob applicant's type (the potential applicants do know theirtypes). Other employment opportunities yield $130,000 to the highskilled types. and $50,000 to the lowskilled types. There are a series of certications that employees can get that may or may not make a particular candidate more qualied and productive, but that are costly for potential employees to obtain, especially for the lowskilled type workers. Specically, to get each certication, high-skilled individuals face a cost valued at $4,500 and lowskilled individuals face a cost valued at $20,000.You decide on the following hiring strategy as a screening device: anyone who has a certain number. 'n, of certications will be regarded as a highskilled individual and anyone who doesn't will be regarded as a low-skilled individual. Which otthe Following number of certi cations required would successfully screen potential employees but still make itin their best interest to get the certications
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