There are two employers in Bucolic that hire people who do not have a high school degree: a grocery store and a hardware store.The grocery store pays $5.00 per hour and the hardware store pays $6.00 per hour.People who work at either store can work as many hours as they want at those wages.Assume that it takes two hours to interview for a job.Lee works at the grocery store,but would like to work at the hardware store.If Lee interviews at the hardware store,there is a 10% probability of being hired.Assume that Lee is risk-neutral.
What is Lee's expected hourly benefit if Lee interviews at the hardware store?
A) $6
B) 60 cents
C) 10 cents
D) $1.00
Correct Answer:
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