Unformatted text preview: Labor Quiz #4 1. How is the market-compensating wage differential between safe jobs and
risky jobs determined? a. From the intersectionof supply and demand. b. Where marginal cost equals marginal benefit. ©From the slope of the hedonic wage function. ., d. Where the MRTS equals the price ratio. 2. What is the impact of health and safety regulations on the utility of workers
and on the profit of firms? a. Increase worker utility; increase profits. b. Increase worker utility; reduce profits. a. Decrease worker utility; increase profits. , @ Decrease worker utility; reduce profits. -— 3. HOW do we calculate the value of a statistical life?
a. From the intersection of supply and demand.
b. Where marginal cost equals marginal benefit. c. From the slope of the hedonic wage function.
@Where the MRTS equals the price ratio. 4. Risky jobs reduce workers’ wellbeing when:
a. Workers have no other well—paying job opportunities.
b. Workers cannot adjust the level of risk in their jobs.
@Workers do not have accurate information about risks.__
d. Firms place the burden of safety on workers. 5. The ”winnEr’s curse” is that:
a. Fringe benefits are often valued at less than their market cost.
1). A worker who receives more desirable benefits than his colleagues is
often faced with resentment.
c. Fringe benefits reduce the amount that the firm can pay a worker.
@ The workers who are most willing to accept a risky job are the ones
who have underestimated the risk by the largest amount. " 6. In order for a fringe benefit to make a worker happier than cash
compensation, it must be the case that:
The worker values the benefit more than cash.
. The firm provides the benefit to all its workers.
he firm can purchase the benefit at lower cost than the worker can.
'. The worker would not be able to purchase the benefit on his own. ...
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- Fall '08