Question 2 Consider the information below: For Group A the cost of attaining an
ID: 1194162 • Letter: Q
Question
Question 2
Consider the information below:
For Group A the cost of attaining an educational level y is
CA(y) = $6,000y
and for Group B the cost of attaining that level is
CB (y) = $10,000y.
Employees will be offered $50,000 if they have y < y*, where y* is an education threshold determined by the employer. They will be offered $130,000 if they have y > y*.
The highest level of y* that can be set and still have the high-productivity people choose to meet it is
A) 16.
B) 13 1/3.
C) 13.
D) 8.
E) 0.
The lowest level of y* that can be set and still have only the high-productivity people meet it is
A) 16.
B) 13 1/3.
C) 13.
D) 8.
E) 0.
If the threshold educational level y* is set at 10,
A) only individuals in Group A will attain it.
B) only individuals in Group B will attain it.
C) individuals in both groups will attain it.
D) no individuals will attain it.
E) some fraction of individuals in each group will attain it.
If the threshold educational level y* is set at 7,
A) only individuals in Group A will attain it.
B) only individuals in Group B will attain it.
C) individuals in both groups will attain it.
D) no individuals will attain it.
E) some fraction of individuals in each group will attain it.
If the threshold educational level y* is set at 14,
A) only individuals in Group A will attain it.
B) only individuals in Group B will attain it.
C) individuals in both groups will attain it.
D) no individuals will attain it.
E) some fraction of individuals in each group will attain it.
Explanation / Answer
Answer to 1st question: B) 13 1/3.
Answer to 2nd question: D) 8.
Answer to 3rd question: A) only individuals in Group A will attain it.
Answer to 4th question: C) individuals in both groups will attain it.
Answer to 1st question: D) no individuals will attain it.
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