Each entry-level software programmer in Palo Alto, California, has either high or low ability. All potential employers value a high-ability worker at $12,000 per month and a low-ability worker at $6,000. The supply of high-ability workers is
QSH = 0.1(W - 7000)
And the supply of low-ability workers is
QSL = 0.1(W - 2000)
Where W is the monthly wage. [These are the functions that lead to the supply curves in Figure 21.3(a).] If workers' abilities are observable to employers, what are the equilibrium wages? How many workers of each type will employers hire? If workers' abilities are not observed by employers, what is the equilibrium wage? How many workers of each type will employers hire? What is the deadweight loss due to asymmetric information?