Suppose the value of the marginal product of a worker is 30,000 in all firms and each firm hires one worker. Let d be uniformly distributed in the range 0 to 5,000. Let there be free entry into the sector with the highest safety costs.
College graduates earn twice as much as high school graduates.
Most natural phenomena are characterized by a normal distribution. The income distribution across individuals of the same age and education is not normally distributed. We discussed several potential explanations in class. Discuss 2 carefully.