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Consider Akerlof's adverse selection model with two-types of workers, studied in class. The only change...

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Accounting

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Consider Akerlof's adverse selection model with two-types of workers, studied in class. The only change is that now there is only one firm (monopsonist). All the rest of the assumptions still hold. In particular, H>r>L>0. (a) Suppose type is contractible, what is the salary the firm offers to the high types? (b) Suppose type is not contractible and ^>r. What salary does the firm offer the workers? Which workers accept the offer

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