The equilibrium hedonic wage function is most likely A. horizontal as firms will choose their optimal...

The equilibrium hedonic wage function is most likely

	A.	horizontal as firms will choose their optimal level of safety.
	B.	downward sloping as firms that offer riskier jobs are usually able to pay lower wages.
	C.	a single point, as all firms will choose the same level of risk, and consequently all workers will be paid the same wage.
	D.	horizontal as no firm will over-pay for workers.
	E.	upward sloping as firms that offer riskier jobs usually pay higher wages.

Solutions

Expert Solution

E .upward sloping as firms that offer riskier jobs usually pay higher wages.

The high risk jobs pay higher wages to compensate the workers for the risk they are taking. This high wage attracts the workers from low risk jobs to work in high risk environment.

Rahul Sunny answered 1 year ago

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