Suppose Matt and Gabe Must Both Choose Between Two Jobs

question 106

Multiple Choice

Suppose Matt and Gabe must both choose between two jobs, a safe job that pays $250 per week and a risky job that pays $300 per week. The value of safety to each is $75 per week. Having more income than the other is worth $75 per week to each, and having less income than the other means a $75-per-week reduction in satisfaction. Having the same income as the other means no change in satisfaction. The payoff matrix below summarizes this situation. If Gabe and Matt choose their jobs at the same time, then you can predict that in the equilibrium of this game:

• A)both Gabe and Matt will choose the safe job.
• B)both Gabe and Matt will choose the risky job.
• C)Gabe will choose the safe job and Matt will choose the risky job.
• D)Matt will choose the safe job and Gabe will choose the risky job.

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Definitions:

SNAP Program

The Supplemental Nutrition Assistance Program, a federal aid program providing food-purchasing assistance for low- and no-income people living in the U.S.

Administrative Costs

Administrative Costs are expenses related to the general operations of a business or organization, including salaries of non-production employees, rent, utilities, and office supplies.

SNAP Program

A federal assistance program that provides funds to low-income individuals and families for purchasing food.

General Revenues

Funds collected by governments from various sources used to finance general public services, without specific limitations on their use.