10. Consider an occupation in which the value of the marginal product of a train

Question

10. Consider an occupation in which the value of the marginal product of a trained worker is VMPT = $X, while the value of the marginal product of an untrained worker is VMPU = $Y. Suppose that during the training the value of the marginal product of a worker is VMPD SZ (net of the costs of training). The training is firm specific and, after the training, the worker has no bargaining power. Assume that the labour market is competitive. Which of the following can be concluded from the observation that a trained worker's wage is S15? A. Y15. B. Y 15 C. X=15 D, Y=15 E, Z=15

Explanation / Answer

If the trained worker wage is 15 then the untrained worker wage(Y)<15 and the value of the marginal product of a worker (Z) is greater than 15. Thus the correct option is(B)

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