An Increase in Safety Standards Does Not Directly Raise the Wage

question 115

Multiple Choice

An increase in safety standards does not directly raise the wage of employees, however a neoclassical analysis of labour markets suggests it will decrease total employment.What mechanism drives this result?

• A)an increase in safety standards leads to more people wishing to enter the labour force
• B)higher safety costs decrease the value of the marginal product of labour, leading to a downward shift in demand
• C)higher safety costs decrease the value of the marginal product of labour, leading to an upward shift in demand
• D)the labour supply curve shifts inwards in response to safer working conditions

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Definitions:

Cash Flows

The sum totality of cash transitions in and out of a commercial operation, markedly influencing its financial fluidity.

Fixed Period

A specified duration of time during which certain conditions, agreements, or investments remain in effect or are executed.

Stated Interest Rate

The annual interest rate declared on a loan or investment, not accounting for compounding or other effects.

Quoted Interest Rate

The interest rate that a lender states or advertises, not accounting for the compounding of interest within a specific period.