Assume That There Are Two Types of Workers: Safe and Risky.At

question 22

Multiple Choice

Assume that there are two types of workers: safe and risky.At the beginning of the first period a firm must decide to hire a safe or risky worker.Safe workers have constant ability worth $200 per period.There is a 50 percent chance a risky worker will have ability worth $300 per period and a 50 percent chance a risky worker will have ability worth $100 per period.Safe workers can be hired for a per-period wage of $190 and risky workers can be hired for a per-period wage of $210.What are the firm's profits if it hires a safe worker?

• A) $5
• B) $10
• C) $20
• D) $30
• E) $50

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Definitions:

Bartering

A system of exchange in which participants in a transaction directly trade goods or services without using a medium of exchange, such as money.

Democratic Leader

A leadership style in which the leader makes decisions based on the input and consensus of the group, promoting participation and equality among team members.

Participation, Teamwork

Encourages involvement and collaborative efforts among team members to achieve common goals through shared responsibilities.

Collaborative Decisions

Decision-making that involves consultation and contribution from multiple stakeholders or team members.