(Solved): Suppose that there are two types of workers: high and low. Employers cannot distinguish between dif ...

Suppose that there are two types of workers: high and low. Employers cannot distinguish between different types during an interview. Employers value high type at \( \$ 200,000 \) and low type at \( \$ 100,000 \). Employers are in a competitive market (i.e. zero profit applies). High type workers have a reservation wage of 140,000 and low type workers have a reservation wage of 80,000 . Suppose that \( 50 \% \) of all workers are high type. The productivities, reservation wages, and the probabilities are common knowledge). Given the wage offered (the answer you found in Q3), which type(s) of workers will accept that offer? Low only High only both None