Suppose That the Salary Range for Recent College Graduates with a Bachelor's

question 93

Multiple Choice

Suppose that the salary range for recent college graduates with a bachelor's degree in economics is $30,000 to $50,000, with 25 percent of jobs offering $30,000 per year, 50 percent offering $40,000 per year and 25 percent offering $50,000 per year and that in all other respects, the jobs are equally satisfying. Assume that in this market, a job offer remains open for only a short time so that continuing to search requires an applicant to reject any current job offer. Moe has just received a job offer that pays $40,000 per year. Moe should:

• A)reject the offer regardless of his preference for risk.
• B)accept the offer if he is risk averse.
• C)reject the offer if he is risk averse.
• D)only accept the offer if he is risk-neutral.

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