Which workers will be employed at the risky firm

Reference no: EM132180438

Question: Workers can choose to work in two types of jobs: a risky job and a safe job. Suppose there are 100 workers in the economy. Worker l's reservation price (for accepting the risky job) is $1; worker 2's reservation price is $2, and so on. Because of technological reasons, there are only 10 jobs in the economy that are risky jobs. What is the equilibrium wage differential between safe and risky jobs? Which workers will be employed at the risky firm? Suppose now that an advertising campaign paid for by the employers who offer risky jobs stresses the excitement associated with "the thrill of injury," and this campaign changes the attitudes of the workforce toward being employed in a risky job. Worker 1 now has a reservation price of -$10 (that is, she is willing to pay $10 for the right to work in the risky job); worker 2's reservation price is - $9, and so on. Risky firms still want to hire only 10 workers. What is the new equilibrium wage differential? Why?

Reference no: EM132180438

Questions Cloud

The motivation technique and approach : Explain the above situation, how you felt up to that point, and the motivation technique and approach that your supervisor or coworker used to help inspire you

What happens to the wage structure in the labor market : Suppose there are two job characteristics that workers care about: wages and health insurance. If the government does not require employers to offer health.

New person assuming the mortgage : Under what interest rate circumstance would banks not object to a new person assuming the mortgage?

Object to a new person assuming the mortgage : Under what interest rate circumstance would banks not object to a new person assuming the mortgage?

Which workers will be employed at the risky firm : Workers can choose to work in two types of jobs: a risky job and a safe job. Suppose there are 100 workers in the economy. Worker l's reservation price.

Excited about making improvements : Miguel recently purchased his first home. He is very excited about making improvements to the home. He decides it would be cheaper if he had his own

Determine which explanation is the correct one : The phenomenal success of a new action serial Die On The Job! has imbued millions of viewers with a romantic perception of work-related risks.

Considered within course and scope of physician work : Fixing a leaking faucet would be considered within the course and scope of a physician’s work.

How economist distinguish between the short run and long run : Explain how economist distinguish between the short run and long run. Why are these concept important to the theory of perfect competition?

User Account

All Pages