Determine which explanation is more plausible

Reference no: EM13225036

Suppose that an increase in the equilibrium compensating wage differential between risk jobs and safe jobs has been observed. Two reasons for this change have been suggested:

(1) it is now more costly for firms to create safe working conditions and

(2) there is a government advertising campaign that alters preferences, thereby convincing workers to require more compensation to take on
risk.
Using supply and demand diagrams, show how each of the two developments can explain the increase in the compensating wage differential. Can information on the number of workers in the risky occupation help determine which explanation is more plausible?

Reference no: EM13225036

Questions Cloud

Calculate the percentage return on the security : Calculate the percentage return on the security if the payoff to the security in one year is $1,000, $1,500, $2,000, or $2,500. (Note: This is the total amount returned to the investor, so you may just calculate the total return and not worry abou..

Explain first-order kinetics and has a half-life : The radioactive decay of radon follows first-order kinetics and has a half-life of 3.823 days. How many grams of radon will remain after 12.00 days if the sample initially had a mass of 455 g?

How would you characterize the demand for haddock : d. How would you characterize the demand for haddock e. Suppose disposable income is expected to increase by 5 percent next year. Assuming all other factors remain constant, forecast the percentage change in the quantity of haddock demanded next year..

State distilling flask be filled to not more than two-thirds : Why should a distilling flask be filled to not more than two-thirds of its capacity at the beginning of a distillation procedure?

Determine which explanation is more plausible : Using supply and demand diagrams, show how each of the two developments can explain the increase in the compensating wage differential. Can information on the number of workers in the risky occupation help determine which explanation is more plaus..

Who purchased the cheaper car willing to accept to save : Assume that a new car hits that market that has been shown to have a lower risk of fatal accident. In particular, 1/5000 cars is expected to result in fatal accident. The risk of fatal accident for the same car without the new safety features is 1..

Explain why is it important that cooling water in distilling : why is it important that cooling water in distilling apparatus enters conceder jacket at at the lower end and exit at the upper end, and not vice versa?

Calculate the labor force participation rate : a. Identify the number of people employed, the number of people unemployed, and the number of people in the labor force. b. Calculate the labor force participation rate, the employment rate, and the labor force unemployment rate

Explain dangerous to heat a liquid in a distilling : why is it dangerous to heat a liquid in a distilling apparatus that is closed tightly at every joint and has no vent to the atmosphere?

User Account

All Pages