The Market-Clearing Wage Differential Between a Safe and Risky Job

question 4

Multiple Choice

The market-clearing wage differential between a safe and risky job is $5000. Which of the following is not true?

• A) The marginal worker is indifferent between working the safe or risky job.
• B) All but the marginal worker in safe jobs require a wage differential above $5000 to accept a risky job.
• C) All but the marginal worker in the risky job require a wage differential below $5000 to be indifferent between safe and risky jobs.
• D) The per-worker cost for any firm to change technologies to offer safe jobs in place of risky jobs is $5000.
• E) The average per worker cost of offering safe jobs exceeds $5000 at the risky firms.

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