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A large steel producer has two types of job offers: ED (Engineer Development) and EM (Engineer Mechanical). Both jobs require an Engineer degree. The ED job requires high analytical skills and computer software development to work in the steel plant. The market entry wage is $118,000. The EM job is less demanding and requires no software development knowledge. Market entry wage is $68,000 for an EM. The firm's hiring policy is: Individuals successfully taking and passing w computer courses during college will be regarded as ED and paid $150,000; otherwise, he or she will be regarded as EM type and paid $70,000. ED's opportunity cost to complete a tough course is $3,000, and EM's opportunity cost to complete a tough course is $12,000 or an opporrtunity cost ratio of 1:4. Instructions: Use one decimal. The w from the incentive-compatibility condition for ED is: The w from the incentive-compatibility condition for EM is: The w from the participation condition for ED is: The firm received new information indicating that the opportunity cost ratio is 1:3. The firm re-calculate the screenin device. The w from the incentive-compatibility condition for ED is: The w from the incentive-compatibility condition for EM is: The w from the participation condition for ED is: Changes in the opportunity cost ratio between types imply: O A range of w is not possible. The screening device is ineffective at recognizing the applicants. The w range is smaller, making more difficult for the firm to set a w that separates the applicants. The w range is larger, making more difficult for the firm to set a w that separates the applicants. The w range is smaller, making easier for the firm to set a w that separates the applicants. A large steel producer has two types of job offers: ED (Engineer Development) and EM (Engineer Mechanical). Both jobs require an Engineer degree. The ED job requires high analytical skills and computer software development to work in the steel plant. The market entry wage is $118,000. The EM job is less demanding and requires no software development knowledge. Market entry wage is $68,000 for an EM. The firm's hiring policy is: Individuals successfully taking and passing w computer courses during college will be regarded as ED and paid $150,000; otherwise, he or she will be regarded as EM type and paid $70,000. ED's opportunity cost to complete a tough course is $3,000, and EM's opportunity cost to complete a tough course is $12,000 or an opporrtunity cost ratio of 1:4. Instructions: Use one decimal. The w from the incentive-compatibility condition for ED is: The w from the incentive-compatibility condition for EM is: The w from the participation condition for ED is: The firm received new information indicating that the opportunity cost ratio is 1:3. The firm re-calculate the screenin device. The w from the incentive-compatibility condition for ED is: The w from the incentive-compatibility condition for EM is: The w from the participation condition for ED is: Changes in the opportunity cost ratio between types imply: O A range of w is not possible. The screening device is ineffective at recognizing the applicants. The w range is smaller, making more difficult for the firm to set a w that separates the applicants. The w range is larger, making more difficult for the firm to set a w that separates the applicants. The w range is smaller, making easier for the firm to set a w that separates the applicants
