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Suppose that workers have 4 levels of productivity. High is 12, middle is 6, low is 3, and trump is negative 1000.The value of time
Suppose that workers have 4 levels of productivity. High is 12, middle is 6, low is 3, and trump is negative 1000.The value of time in leisure is half that of productivity.High and trump productivity workers are 10 percent of the labor force. Middle productivity is 30 percent and low productivity is 50 percent. What is the equilibrium wage? Is there adverse selection?
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