Answer questions based on the following table, in which MBs and MCs are the marginal benefit and marginal cost of safety, respectively. Ps is the probability that a worker will not suffer an injury on the job during a one year period, and is thus a measure of job safety.

$\begin{array}{l}
\begin{array}{l}
\underline{P}_{s} \
.65 \
.70 \
.75 \
.80 \
.85 \
.90 \
.95
\end{array}
\begin{array}{c}
\underline{MB}_{s}\
{25} \
22 \
19 \
16 \
13 \
10 \
7
\end{array}
\begin{array}{c}
\underline{MC}_{s}\
8\
10 \
12 \
14 \
16 \
18 \
20
\end{array}
\end{array}$
-If workers underestimate the actual amount of risk associated with the job because of imperfect information,the values in the:

Question

Answer questions  based on the following table, in which MBs and MCs are the marginal benefit and marginal cost of safety, respectively.  Ps is the probability that a worker will not suffer an injury on the job during a one year period, and is thus a measure of job safety.

$\begin{array}{l}
\begin{array}{l}
\underline{P}_{s} \
.65 \
.70 \
.75 \
.80 \
.85 \
.90 \
.95
\end{array}
\begin{array}{c}
\underline{MB}_{s}\
{25} \
22 \
19 \
16 \
13 \
10 \
7
\end{array}
\begin{array}{c}
\underline{MC}_{s}\
8\
10 \
12 \
14 \
16 \
18 \
20
\end{array}
\end{array}$
-If workers underestimate the actual amount of risk associated with the job because of imperfect information,the values in the:

Quizplus · Accepted Answer

If workers underestimate the actual amount of risk associated with the job, they will perceive the marginal benefit of safety to be lower than it actually is, which means the MB_s column will understate the true marginal benefit. This, in turn, will lead to the profit-maximizing level of job safety being less than the optimal level as the firm will not take into account the full benefits of providing a safer workplace.

Answer Questions Based on the Following Table, in Which