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Suppose Labor Is Perfectly Competitive and There Are Only Two

Question 15

Multiple Choice

Suppose labor is perfectly competitive and there are only two periods.For which values of the interest rate,r,costs of training,i,and value added by training,V,is the training opportunity inefficient?


A) i = $50,V = $150,r = 10%
B) i = $40,V = $100,r = 10%
C) i = $60,V = $125,r = 5%
D) i = $90,V = $125,r = 5%
E) i = $90,V = $100,r = 15%

Correct Answer:

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