When workers indifference curves are drawn for wage rates versus injury risk,
A) the indifference curves slope downwards because a higher wage is required to accept a higher risk of injury.
B) the indifference curves slope upwards because a higher wage is required to accept a higher risk of injury.
C) utility increases as a worker moves to the right along an indifference curve.
D) utility decreases as a worker moves to the right along an indifference curve.

Question

Quizplus · Accepted Answer

The indifference curves slope upwards because a higher wage is required to compensate for a higher risk of injury. Workers will accept a higher level of risk if they are adequately compensated with a higher wage. Therefore, the quantity of compensation required to accept a given level of risk increases as the level of risk increases.

When Workers Indifference Curves Are Drawn for Wage Rates Versus