Suppose that all workers value a safe job $2,000 per year more than a risky job. The cost to firms of providing a safe job is $700 per year for each worker. Firms currently pay workers $35,000 per year, without any effort to improve safety. If new firms began to offer workers $34,000 per year and safe jobs, the value workers would place on the new firms' offer would be ______ compared to ______ at the existing firms.
A)$1,000; $0
B)$1,000; $1,000
C)$34,000; $33,000
D)$36,000; $35,000

Question

Quizplus · Accepted Answer

Workers value a safe job $2,000 more, so the new firm's offer of $34,000 with safety is valued at $36,000. The existing firm's offer is $35,000 without safety.

Suppose That All Workers Value a Safe Job $2,000 Per