Question: The following figure shows the market for lows killed labour.
The value of marginal product of high-skilled workers is $16 an hour greater than that of lows killed workers at each quantity of labour. The cost of acquiring human capital adds $12 an hour to the wage that must be offered to attract high-skilled labour. Compare the equilibrium wage rates of lows killed labour and high-skilled labour. Explain why the difference between these wage rates equals the cost of acquiring human capital.