In the one-sided search model, the welfare of an employed worker
A)is lower than the welfare of an unemployed workers.
B)in a concave function of the real wage.
C)increases with employment insurance benefits.
D)decreases with the real wage.
E)is convex in the real wage.

Question

Quizplus · Accepted Answer

In the one-sided search model, the welfare of an employed worker is typically modeled as a concave function of the real wage, reflecting diminishing marginal utility of income.

In the One-Sided Search Model, the Welfare of an Employed