The cost,c,of a college education that serves only as a signal of a high-quality worker is $20,000.The wage of a known high-quality worker,w_h,is $75,000.The wage for a known low-quality worker,w₁,is $50,000.For what value of the share of the work force that is of high quality,t,is a pooling equilibrium possible?

Question

Quizplus · Accepted Answer

The Answer of The cost,c,of a college education that serves only as a signal of a high-quality worker is $20,000.The wage of a known high-quality worker,w_h,is $75,000.The wage for a known low-quality worker,w₁,is $50,000.For what value of the share of the work force that is of high quality,t,is a pooling equilibrium possible?

The Cost,c,of a College Education That Serves Only as a Signal