In the traditional labor model, the supply of labor interacts with the demand for labo to produce a single equilibrium wage paid to all workers. In contrast, when workers care about job traits as well as wages, the compensating wage model predicts that O workers and firms are randomly matched. O workers who accept jobs with the worst job traits will be paid the lowest wages. workers who accept jobs with the worst job traits will be paid the highest wages. O a single equilibrium wage comes about even when jobs traits differ, with some workers getting "lucky" to have the jobs with the best traits.

In the traditional labor model, the supply of labor interacts with the demand for labo to produce a single equilibrium wage paid to all workers. In contrast, when workers care about job traits as well as wages, the compensating wage model predicts that O workers and firms are randomly matched. O workers who accept jobs with the worst job traits will be paid the lowest wages. workers who accept jobs with the worst job traits will be paid the highest wages. O a single equilibrium wage comes about even when jobs traits differ, with some workers getting "lucky" to have the jobs with the best traits.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.8P

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