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Suppose there are 100 workers in the economy. The workers have to choose between a clean job and a dirty job. Worker 1’s reservation price for taking the dirty job is $1; worker 2’s reservation price is $2, etc. Because of government restrictions, there are only 20 dirty jobs.1. What is the equilibrium wage differential between a clean job and a dirty job? Explain answer. 2. Which workers (among workers 1, 2,..., 100) will be employed at the dirty jobs?

Suppose there are 100 workers in the economy. The workers have to choose between a clean job and a dirty job. Worker 1’s reservation price for taking the dirty job is $1; worker 2’s reservation price is $2, etc. Because of government restrictions, there are only 20 dirty jobs.1. What is the equilibrium wage differential between a clean job and a dirty job? Explain answer. 2. Which workers (among workers 1, 2,..., 100) will be employed at the dirty jobs?

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter15: Unemployment
Section: Chapter Questions
Problem 4QCMC
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Suppose there are 100 workers in the economy. The workers have to choose between a clean job and a dirty job. Worker 1’s reservation price for taking the dirty job is $1; worker 2’s reservation price is $2, etc. Because of government restrictions, there are only 20 dirty jobs.
1. What is the equilibrium wage differential between a clean job and a dirty job? Explain answer. 
2. Which workers (among workers 1, 2,..., 100) will be employed at the dirty jobs?

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