Suppose That All Workers Value a 1 Percent Reduction in the Workplace

question 73

Multiple Choice

Suppose that all workers value a 1 percent reduction in the workplace injury rate at $1,000 per year. The cost of reducing the injury rate by 1 percent is $200 per year for each worker. Firms currently pay $20,000 per year to workers, without any effort to improve safety. If new firms began to offer workers $19,500 and a 1 percent reduction in the injury rate, then the value to each worker of the new firms' offer would be ______ compared to ______ at the existing firms.

• A)$19,500; $20,000
• B)$20,500; $20,000
• C)$19,700; $19,800
• D)$20,000; $20,000

---

Definitions:

Disposal

Disposal refers to the act of selling, discarding, or removing an asset from a company's balance sheet, often due to obsolescence, excess, or replacement.

Long-Lived Asset

A long-lived asset is a tangible or intangible asset with a useful life of more than one year, used in the operating activities of a business, such as buildings, machinery, or patents.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net assets.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an active market.