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Suppose that there are two types of workers: high and low. Employers cannot distinguish between different types during an interview. Employers value high type at
Suppose that there are two types of workers: high and low. Employers cannot distinguish between different types during an interview. Employers value high type at $200,000 and low type at $100,000. Employers are in a competitive market (i.e. zero profit applies). High type workers have a reservation wage of 160,000 and low type workers have a reservation wage of 80,000. Suppose that 50% of all workers are high type. The productivityes, reservation wages, and the probabilities are common knowledge). What wage would the employers offer? $100,000 $150,000 $160,000 $200,000 Suppose that there are two types of workers: high and low. Employers cannot distinguish between different types during an interview. Employers value high type at $200,000 and low type at $100,000. Employers are in a competitive market (i.e. zero profit applies). High type workers have a reservation wage of 160,000 and low type workers have a reservation wage of 80,000. Suppose that 50% of all workers are high type. The productivityes, reservation wages, and the probabilities are common knowledge). Given the wage offered (the answer you found in Q1), which type(s) of workers will accept that offer? O High only. O Low only. O Both O Neither
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