Suppose that there are two types of workers in the labor market, high ability workers and low-ability workers.Firms pay workers their marginal products but they cannot distinguish the types of workers, so firms may have to pay the same wage.You are the owner of a firm and going to hire a worker.Assume education, experience, or marital status, and other variables have no impacts on the workers' marginal products.

a.Explain the possibility of adverse selection.

b.What kind of employment strategy do you need to minimize the possibility of adverse selection?Explain it with the concepts of signaling.