When a worker and firm are matched on the hedonic wage function, it is implied that
A) the worker cannot receive a higher wage at any other firm.
B) the worker-firm match is efficient in the sense that neither the worker nor the firm could become better off with a different match.
C) the firm could increase its profits by offering a safer job as doing so would allow the firm to lower the wage it pays.
D) the hedonic wage function must be very steeply sloped to ensure that the worker does not accept a better paying job.
E) the worker receives no surplus from the match.

Question

Quizplus · Accepted Answer

The concept of a hedonic wage function implies that the match between a worker and a firm maximizes the utility of the worker and the profit of the firm in such a way that neither party could be better off by choosing a different match, making the match efficient.

When a Worker and Firm Are Matched on the Hedonic