Assuming that workers are fully aware of their working conditions, which of the following will not happen when the government mandates pollution control to protect workers' health?
A)Worker utility will increase.
B)Employment will decrease.
C)The air in workplaces will become cleaner.
D)Firms with low-profits before the mandate may shut down or exit the industry.
E)Wages will fall at all but the cleanest firms.

Question

Quizplus · Accepted Answer

If workers are fully aware of their working conditions, their utility is already maximized given their preferences and the trade-offs they are willing to make. Mandating pollution control may not increase their utility if they have already factored in the risks and benefits of their current working conditions.

Assuming That Workers Are Fully Aware of Their Working Conditions