Suppose There Are Two Types of Jobs-Safe and Risky

question 3

Multiple Choice

Suppose there are two types of jobs-safe and risky. Safe jobs currently pay $10 per hour. Risky jobs currently pay $20 per hour. The government intervenes in the market, mandating that all firms offer safe jobs and pay a wage of $10 per hour. Which of the following is true?

• A) Workers who originally worked safe jobs are helped by the policy.
• B) Firms that originally offered safe jobs are hurt by the policy.
• C) Workers who originally worked risky jobs are helped by the policy.
• D) Firms that originally offered risky jobs are hurt by the policy.
• E) No one is hurt by the new policy.

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Definitions:

Initial Cost

The upfront expenditure related to acquiring or starting a new project or investment, not including ongoing or future costs.

Risk Level

A measure of the uncertainty associated with achieving return objectives within investing, often determined by the volatility in asset prices and market fluctuations.

Project Life

The duration from the initiation to the conclusion of a project, encompassing all stages of development and execution.

OTC Market

Over-the-counter market, where securities are traded directly between parties without the supervision of an exchange.