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Assignment help 5820

A certain city has two kinds of workers, alphas and betas.

An alpha can produce $110 worth of output per day working for himself. If he works in

the local factory, he produces $120 worth of output a day.

A beta produces $60 worth of output per day working for himself, and he produces $80 worth of output per day if he works for the local factory.

Workers either work for themselves or work in the factory.

The factory owner can’t tell alphas from betas. He pays a wage equal to the average product of his labour force and he has some alphas working for him.

Workers are free to choose to work for themselves or the factory, depending on which offers more money.

a.

At least 60% of the factory’s employees must be betas

b.

None of the factory’s employees can be betas.

c.

At least half of the factory’s employees must be betas.

d.

At least 75% of the factory’s employees must be alphas.

e.

At least half of the factory’s employees must be alphas

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