Suppose that in Enigma, Ohio, Uselets have a productivity of $1,000 and Candus have a productivity of $5,000 per month. You can’t tell Uselets from Candus by looking at them or asking them, and it is too expensive to monitor individual productivity.
Candus, however, have more patience than Uselets. Listening to an hour of dull lectures is as bad as losing $250 for a Uselet and $100 for a Candu. There will be a separating eqilibrium in which anybody who attends a course of H hours of lectures is paid $5,000 per month and anybody who does not is paid $1,000 per month
a.
if 16 < H < 40.
b.
if 14 < H < 35.
c.
if 16 < H < 80.
d.
only in the limit as H approaches infinity.
e.
for all positive values of H
