Figure 21.2 shows the benefit functions for low-ability workers and high-ability workers (A and B),along with one indifference curve for each worker type (C and D).The employer cannot observe worker type directly but has created two positions,E and F,as a screening mechanism.Which of the following is true?
A) Curve A is an indifference curve for a low-ability worker, and curve B is an indifference curve for a high-ability worker.
B) Curve A is the benefit curve for high-ability workers, and curve B is an indifference curve for a high ability worker.
C) Curve A is an indifference curve for a high-ability worker, and curve C is the benefit curve for high-ability workers.
D) Curve A is the benefit curve for high-ability workers, and curve C is an indifference curve for a high ability worker.

Question

Figure 21.2 shows the benefit functions for low-ability workers and high-ability workers (A and B),along with one indifference curve for each worker type (C and D).The employer cannot observe worker type directly but has created two positions,E and F,as a screening mechanism.Which of the following is true? 
A) Curve A is an indifference curve for a low-ability worker, and curve B is an indifference curve for a high-ability worker. 
B) Curve A is the benefit curve for high-ability workers, and curve B is an indifference curve for a high ability worker. 
C) Curve A is an indifference curve for a high-ability worker, and curve C is the benefit curve for high-ability workers. 
D) Curve A is the benefit curve for high-ability workers, and curve C is an indifference curve for a high ability worker.

Quizplus · Accepted Answer

The Answer of Figure 21.2 shows the benefit functions for low-ability workers and high-ability workers (A and B),along with one indifference curve for each worker type (C and D).The employer cannot observe worker type directly but has created two positions,E and F,as a screening mechanism.Which of the following is true? 
A) Curve A is an indifference curve for a low-ability worker, and curve B is an indifference curve for a high-ability worker. 
B) Curve A is the benefit curve for high-ability workers, and curve B is an indifference curve for a high ability worker. 
C) Curve A is an indifference curve for a high-ability worker, and curve C is the benefit curve for high-ability workers. 
D) Curve A is the benefit curve for high-ability workers, and curve C is an indifference curve for a high ability worker.

Figure 212 Shows the Benefit Functions for Low-Ability Workers and High-Ability