The Equilibrium Hedonic Wage Function Is Most Likely

question 22

Multiple Choice

The equilibrium hedonic wage function is most likely

• A) horizontal as no firm will overpay for workers.
• B) horizontal as firms will choose their optimal level of safety.
• C) a single point, as all firms will choose the same level of risk, and consequently all workers will be paid the same wage.
• D) upward sloping as firms that offer riskier jobs usually pay higher wages.
• E) downward sloping as firms that offer riskier jobs are usually able to pay lower wages.

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Definitions:

Estimated

An approximate calculation or judgment of a value, number, or quantity, based on limited information.

Selling and Administrative Expense

Overheads related to the selling of products and the management of an organization.

Variable

An element, feature, or factor that is liable to vary or change.

Fixed

Pertains to expenses that remain constant for a given period regardless of the level of production or business activity.