ECON 261 Lecture Notes - Lecture 4: W. M. Keck Observatory
Document Summary
There are 4 workers in this economy , jack , fred, Melba) are highly skilled ( q=0. 9) ; the other two ( fred and daphne) are less skilled ( q=0. 3). Output is given by the product of the q-levels for example firm 1 might hire a high skill worker and a low skill worker. Output of thsi firm would be 0. 9*0. 3= 0. 27. Total income: calculate the total output that would be produced by these two firms under each of the following scenarios: Firm a hires jack and fred and firm b hires melba and daphne. Firm a hires jack and melba and firm b hires fred and daphne. Pairing the high skill workers in one of the team and low skill workers leads to highest output level. 0. 90: repeat the above calculations but with highly skilled workers having a q value of 0. 6 and low skill workers 0. 5. Output of a output of b total output.