For the High-Productivity Group K the cost of attaining an educational level y is CH(y)=$5000y And for the Low-Productivity Group M the cost of attaining that level is CL(y)=$10,000y
Employees will be offered $30,000 if they have y
A) What is the highest level of y* that can be set and still have the high-productivity people choose to meet it?
B) What is the lowest level of y* that can be set and still have only the high-productivity people meet it?
C) Which of the two groups will choose to attain it is the threshold educational level y* is set at 15? At 8? And at 5?
D) Suppose an employer only wants to hire high productivity workers. What is the range of between which it shoul set y* to ensure such?