When a Worker and Firm Are Matched on the Hedonic

question 29

Multiple Choice

When a worker and firm are matched on the hedonic wage function, it is implied that

• A) the worker cannot receive a higher wage at any other firm.
• B) the worker-firm match is efficient in the sense that neither the worker nor the firm could become better off with a different match.
• C) the firm could increase its profits by offering a safer job as doing so would allow the firm to lower the wage it pays.
• D) the hedonic wage function must be very steeply sloped to ensure that the worker does not accept a better paying job.
• E) the worker receives no surplus from the match.

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Definitions:

Demanding Tone

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Tone

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