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Comprehension Check Problem 3
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You will have three comprehension check problems. This one is the first
There is one empty job position and you want to hire a worker.
There are two workers, Ann and Bob.
With equal chance, only Ann wants to get a job, only Bob wants to get a job, or both want to get a job.
You have only ONE job. Thus, if both want to get a job, a fair coin decides who gets a job.
You will submit your wage offer but when you make the offer, you do not know if the worker who wants to get a job is
Ann, Bob, or both.
You offer only ONE wage for both Ann and Bob.
The revenue each worker brings you when you hire them is given as below:
Revenue from each Worker
Ann
Bob
55
37
Each worker has a minimum willingness to accept, which means the minimum wage that the worker would accept.
The worker accepts any wage higher than or equal to the minimum willingness to accept
In that case, your profit is: Revenue the worker brings you - Wage Offer
Otherwise, the worker rejects the offered wage
In that case, your profit is 0
Each person's minimum willingness accept is given as below:
Minimum Willingness to Accept
Ann
Bob
8
20
Suppose that you choose 23 for the wage. What would be your revenue?
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