As the Mayor of a Local Town,Newman Has the Power

question 81

Multiple Choice

As the mayor of a local town,Newman has the power to repeal workplace safety laws.How would repealing all workplace safety laws affect the wages of kindergarten teachers who work in relatively safe jobs at the local school?

• A) It would reduce teachers' wages because of less-severe negative compensating differentials.
• B) It would increase teachers' wages because of less-severe negative compensating differentials.
• C) It would reduce teachers' wages because of more-severe negative compensating differentials.
• D) It would increase teachers' wages because of more-severe negative compensating differentials.
• E) It would have little effect on teachers' wages because of a lack of negative compensating differentials.

---

Definitions:

Oligopolists

Firms operating in an oligopoly, a market structure characterized by a few dominant players, which can influence prices and market practices.

Marginal Cost

The additional financial burden incurred when one more unit of a good or service is produced.

Positive-Sum Game

In game theory, a game in which the gains (+) and losses (−) add up to more than zero; one party’s gains exceed the other party’s losses. A strategic interaction (game) between two or more parties (players) in which the winners’ gains exceed the losers’ losses so that the gains and losses sum to something positive.

Positive Payoffs

Benefits or gains that are realized from an investment or action, often assessed in terms of profitability or value added.