Suppose that a worker value jobs by both the wage rate and the workplace collegiality. The woker's utility is strictly increasing in the wage rate but strictly decreasing in the chance of being bullied in the workplace. The utility function of the worker is U = wª (1-), where a = 0.5, w is the wage rate and b is the probability that a worker is bullied in a workplace. Suppose for a typical job A, the chance of getting bullied is 0.01, and the wage rate is 100. Which of the following statements is correct? %3D If job B offer w = 121 and b = 0.04, the worker would prefer job B to job а. А If job B offer w = 144 and b = 0.09, the worker would prefer job B to job b. А If job B offer w = 80 and b = 0, the worker would prefer job B to job A С. If job B has bullying probablity b = 0.04, the worker is indifferent between job A and job B. Then, the compensating wage differential of job B is at least 25. d. If job B offer w = 80 and b = 0, the worker would be indifferent between job A and job B. e.

Suppose that a worker value jobs by both the wage rate and the workplace collegiality. The woker's utility is strictly increasing in the wage rate but strictly decreasing in the chance of being bullied in the workplace. The utility function of the worker is U = wª (1-), where a = 0.5, w is the wage rate and b is the probability that a worker is bullied in a workplace. Suppose for a typical job A, the chance of getting bullied is 0.01, and the wage rate is 100. Which of the following statements is correct? %3D If job B offer w = 121 and b = 0.04, the worker would prefer job B to job а. А If job B offer w = 144 and b = 0.09, the worker would prefer job B to job b. А If job B offer w = 80 and b = 0, the worker would prefer job B to job A С. If job B has bullying probablity b = 0.04, the worker is indifferent between job A and job B. Then, the compensating wage differential of job B is at least 25. d. If job B offer w = 80 and b = 0, the worker would be indifferent between job A and job B. e.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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