When relatively few workers have high ability,
A) they will settle for the average wage.
B) they will want to signal their ability.
C) the premium for high ability is less than when most workers have high ability.
D) they do not need to signal their ability.
B
You might also like to view...
The conclusion that a monopoly results in lower output and higher prices than perfect competition relies on the assumption that
A) the demand curve for a monopoly is horizontal. B) consumers are ignorant of the effects of monopoly. C) the costs of production are the same whether the industry is perfectly competitive or a monopoly. D) elasticity of demand varies along the market demand curve.
Price discrimination is more likely in the case of services than in the case of goods because
A. it is more difficult to resell services. B. elasticities of demand vary more with services than with goods. C. producers of goods usually do not face downward sloping demand curves. D. it is easier to distinguish customers with different elasticities of demand with respect to services than with goods.