Wage V. Figure 3 Hedonic Wage Function VI. U₁ 7M. U. 15, Pe Th₂ سے ہے۔ U₂ Hedonic Wage Function Probability of Injury Based on figure 3 above, explain in detail the indifference curves for the three types of workers? (6 marks) Based on figure 3 above, explain in detail the isoprofit curves. (6 marks)
VII. Assume that the hedonic wage function is: w₁ = ap₁ + other variables where 'a' is the wage change associated with one unit increase in the probability of injury A US consensus estimate fatal injuries at 0.001 with associated increase annual earnings by about US$6,600 for workers in such risky jobs. From the above scenario answer the following questions: a. Explain the number 0.001 as it relates to the hedonic wage function. (3 marks) b. What is the reservation price for riskier jobs? (1 marks) c. If there are 1,000 workers in a firm, what is the statistical value of life (5 marks)
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