Assume a worker utility function is µ = f(wo,w₁) where wo represents safe jobs with a probability of zero risk of injury
Posted: Sun Jul 03, 2022 12:58 pm
- Assume A Worker Utility Function Is U F Wo W Where Wo Represents Safe Jobs With A Probability Of Zero Risk Of Injury 1 (78.56 KiB) Viewed 11 times
- Assume A Worker Utility Function Is U F Wo W Where Wo Represents Safe Jobs With A Probability Of Zero Risk Of Injury 2 (70.75 KiB) Viewed 11 times
IV. Assuming that there are many types of firms (instead of justthose offering safe and risky jobs), then the probability of injurycan take any value between 0 and 1. In light of this preamble,briefly state what a hedonic wage function seeks to reflect. (2marks)
PLEASE ASSIST WITH PARTS III AND IV SHOWING APPROPRIATEWORKINGS WHERE NECESSARY
Assume a worker utility function is µ = f(wo,w₁) where wo represents safe jobs with a probability of zero risk of injury w₁represents risky jobs with a probability of 1 that there is some degree of risk of injury Figure 1 Indifference curves relating the wage and the probability of injury AW A Wage 3 W W₂ O QU 1 U₁ Probability of Injury
Figure 2 Determining the market compensating differential II. W₁-W', A E D Number of Workers in Risky Job Based on figure 2 above, explain in detail how firms choose which type of job to offer and which is more profitable. The answer should discuss the work environment, the demand curve and supply curve, the market compensating differential. (6 marks)