If it is diﬃcult to differentiate between good and bad workers, then the labour market is said to be under a _____ equilibrium.
A) pooling
B) separating
C) partial
D) Nash

Question

Quizplus · Accepted Answer

In a pooling equilibrium, it is difficult to differentiate between good and bad workers because everyone is treated the same or "pooled" together. This contrasts with a separating equilibrium, where different types of workers are treated differently based on some sort of signaling or screening mechanism.

If It Is Diﬃcult to Differentiate Between Good and Bad