Suppose 40 percent of all potential workers are highly skilled and contribute $50,000 to the firm each year. The remaining 60 percent of potential workers are less skilled and contribute only $30,000 to the firm each year. When schooling is not used as a signaling device, how much is the firm willing to pay a worker chosen at random?

Question

Business

Harley Oliver

5 June, 04:33

Suppose 40 percent of all potential workers are highly skilled and contribute $50,000 to the firm each year. The remaining 60 percent of potential workers are less skilled and contribute only $30,000 to the firm each year. When schooling is not used as a signaling device, how much is the firm willing to pay a worker chosen at random?

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Answers (1)

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Keaton Bowers · Answer 1

The firm willing to pay a worker chosen at random an amount of $38,000.

Explanation:

This can be calculated as follows:

Amount the firm is willing to pay = (40% * $50,000) + (60% * $30,000) = $20,000 + $18,000 = $38,000.

Therefore, the firm is willing to pay a worker chosen at random an amount of $38,000.