Answer Questions Based on the Following Table, in Which

question 39

Multiple Choice

Answer questions based on the following table, in which MBs and MCs are the marginal benefit and marginal cost of safety, respectively. Ps is the probability that a worker will not suffer an injury on the job during a one year period, and is thus a measure of job safety.


$\begin{array}{l}\begin{array}{l}\underline{P}_{s} \\.65 \\.70 \\.75 \\.80 \\.85 \\.90 \\.95\end{array}\begin{array}{c}\underline{MB}_{s}\\{25} \\22 \\19 \\16 \\13 \\10 \\7\end{array}\begin{array}{c}\underline{MC}_{s}\\8\\10 \\12 \\14 \\16 \\18 \\20\end{array}\end{array}$
-If workers underestimate the actual amount of risk associated with the job because of imperfect information,the values in the:

• A)MB_s column will understate the true marginal benefit and the profit-maximizing level of job safety will be less than the optimal level
• B)MB_s column will overstate the true marginal benefit and profit-maximizing level of job safety will exceed the optimal level
• C)MC_s column will overstate the true marginal cost and the profit-maximizing level of job safety will exceed the optimal level
• D)MC_s column will understate the true marginal cost and the profit-maximizing level of job safety will exceed the optimal level

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Definitions:

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A temperament style where individuals are initially hesitant or cautious in new situations but become more comfortable with time.

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A psychological model that describes the dynamics of long-term and short-term interpersonal relationships between humans, particularly focusing on how parent-child relationships influence development.