Multiple Choice
In a labor-market separating equilibrium with high-skill and low-skill workers and where a costly educational degree is used solely as a signal device,government can increase total social welfare by
A) subsidizing school for low-skill workers.
B) subsidizing school for all workers.
C) eliminating schooling, i.e., banning wasteful signaling.
D) subsidizing school for high-skill workers.
Correct Answer:
Verified
Correct Answer:
Verified
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