Suppose That the Salary Range for Recent College Graduates with a Bachelor's

question 76

Multiple Choice

Suppose that the salary range for recent college graduates with a bachelor's degree in economics is $30,000 to $50,000, with 25 percent of jobs offering $30,000 per year, 50 percent offering $40,000 per year and 25 percent offering $50,000 per year and that in all other respects, the jobs are equally satisfying. Assume that in this market, a job offer remains open for only a short time so that continuing to search requires an applicant to reject any current job offer. Who will accept an offer of $30,000?

• A)Graduates who have been searching the longest
• B)Graduates who enjoy taking risks
• C)Graduates who are either risk-neutral or risk-averse
• D)Graduates who are risk-averse

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Definitions:

Negative Feedback System

A regulatory mechanism in which a change in a system's output acts to stabilize or reduce further change.

Positive Feedback System

A system in which a change in some steady state triggers a response that intensifies the changing condition. Compare with negative feedback system.

Set Point

A theory suggesting that the body regulates physiological functions, such as temperature or weight, around a specific homeostasis level or 'set point'.

Stressor

Any biological, chemical, physical, or psychological factor that causes stress to an organism, potentially leading to disease or harm.