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1University of California, Santa Barbara Olivier Deschênes Department of Economics Winter 2009 Economics 150B Practice Questions for Midterm 1True/False/Uncertain questions: (To receive full credit you must explain/prove your answers)1. Certain occupations, such as coal mining, are inherently dangerous to worker’s health and safety. Therefore, the most appropriate government policy is the establishment and enforcement of rigid safety standards (assume that workers are fully informed about the risk involved with coal mining jobs). 2. The fact that workers with a college degree receive higher wages andare employed on safer jobs than workers without a college degree provides evidence against the theory of compensating wage differentials. 3. If all workers prefer jobs with less risk, workers on the more risky jobs would like to move to the safer jobs. Short definition questions: Define the following: (a) Hedonic wage function (b) Compensating wage differential (c) Value of a statistical life
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