Assume That the Market-Clearing Wages Are $10 Per Hour in a Safe

question 8

Multiple Choice

Assume that the market-clearing wages are $10 per hour in a safe job and $18 per hour in a risky job. Then, at the completion of a war, many ex-soldiers who enjoy risky ventures enter the labor market. Which of the following is not a likely outcome of this change?

• A) Many firms that currently offer risky jobs will begin offering safe jobs.
• B) The fraction of people working safe jobs will decrease.
• C) The wage associated with risky jobs will decrease.
• D) The number of people working risky jobs will increase.
• E) The wage differential will decrease.

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Definitions:

Units Sold

Refers to the total number of individual items sold by a company during a specific period, indicative of sales volume.

Goods On Consignment

Goods given to a third party (consignee) to sell, where the original owner (consignor) retains ownership until sale.

Consignor

The entity or person that sends goods to another (the consignee) to be sold, while retaining ownership until the goods are sold.

Consignee

The individual or entity to whom goods are shipped under a consignment agreement, responsible for selling the goods.