Question 1

The value of a statistical life is defined as VSL=$B/S.What is the interpretation of B in this equation?

Accepted Answer

B represents the benefit derived from saving S lives. It is the monetary value that individuals or society places on each life saved.

Question 2

The total workplace injury rate _______ from 1990 to 2000 and _______ from 2000 onward.

Accepted Answer

The total workplace injury rate fell from 1990 to 2000 and continued to fall from 2000 onward, reflecting improvements in workplace safety and regulations.

Question 3

In a hedonic model,each worker's utility,u,depends upon his consumption,c,and a single job attribute,z.If z represents fatality risk,risk averse individuals' indifference curves will:

Accepted Answer

Since risk averse individuals are more sensitive to changes in the fatality risk, their indifference curves will be relatively steep. They will require a higher level of compensation to accept a job that poses higher fatality risk.

Question 4

The Occupational Health and Safety Act is charged with:

Accepted Answer

The Occupational Health and Safety Act's primary objective is to reduce workplace injuries and fatalities through promoting safe working conditions, enforcing regulations, and providing training and education.

Question 5

According to the Pelzman effect,agents respond to inherent improvements in safety by _______ their own safety efforts.So,increases in workplace safety can potentially
Cause _______ in accidents.

Accepted Answer

The Pelzman effect suggests that when safety measures are improved, individuals may reduce their own safety efforts, potentially leading to an increase in accidents.

Question 6

What does the term hedonic mean when used in the phrase hedonic pricing?

Accepted Answer

Hedonic pricing refers to the technique of valuing goods or services based on their underlying characteristics or attributes. These attributes include quality, size, location, and other characteristics that can impact the price of a product or service. Hedonic pricing is considered a quality-adjusted approach to pricing.

Question 7

Why will active government policy to increase workplace safety reduce overall welfare?

Accepted Answer

The hedonic wage model assumes that in a competitive market, there is an efficient level of workplace safety that maximizes the overall utility of workers. This means that if the government tries to increase workplace safety beyond this level, it will come at a cost to the overall welfare because it will reduce the profits of firms and increase the cost of labor. This could lead to firms cutting back on hiring or reducing wages, which would decrease the overall welfare of workers. Therefore, pursuing an active government policy to increase workplace safety beyond the efficient level would not be beneficial.

Question 8

Let $B denote the maximum combined amount that a group of workers is willing to pay to implement safety policy X.What is the formula for calculating the value of a
Statistical life,as defined by these workers?

Accepted Answer

The value of a statistical life (VSL) is typically defined as the amount a group of individuals is willing to pay to reduce their risk of dying. In this case, the maximum amount they are willing to pay is B, and the number of workers whose lives will be saved by policy X is S. Therefore, the formula for calculating the VSL is VSL = $B/S.

Question 9

Which of the following is NOT a plausible result of an increase in the generosity of benefit payments received under workers' compensation laws?

Accepted Answer

An increase in the generosity of benefit payments received under workers' compensation laws would likely lead to a decrease in workplace accidents and injuries as well as an increase in the number of legitimate claims filed. However, employers would not be incentivized to employ more lax workplace safety standards as this would increase the risk of accidents and injuries, leading to higher workers' compensation insurance premiums. Additionally, employers would attempt to entice workers back to work earlier to reduce the duration of the time they spend out of work. There may be an increase in fraudulent claims, where workers fabricate or exaggerate the extent of their injuries to receive higher benefits. However, this would be outweighed by the increase in legitimate claims. Finally, an increase in the generosity of benefit payments would not necessarily lead to employers hiring fewer workers.

Question 10

Under an experience-rated workers' compensation system,employers' insurance premiums increase with:

Accepted Answer

Under an experience-rated workers' compensation system, employers' insurance premiums increase with the number of prior workplace injuries. This is because the more workplace injuries an employer has had in the past, the higher the risk that there will be future injuries or accidents, which would result in more claims and cost more money. Therefore, employers with poor safety records will face higher insurance premiums than those with fewer injuries.

Question 11

How do economists estimate the value of a statistical life?

Accepted Answer

The answer of How do economists estimate the value of...

Question 12

Why are injury and fatality rates endogenously determined in the hedonic framework?

Accepted Answer

The answer of Why are injury and fatality rates endogenously...

Question 13

In the context of workers' compensation,the replacement rate is defined as:

Accepted Answer

The answer of In the context of workers' compensation,the replacement...

Question 14

Assume that a job package is characterized by the pair (w,z)where w is the wage,and z is a single undesirable non-wage job attribute.A firm's iso-profit curves:

Accepted Answer

Iso-profit curves represent a set of (w,z)pairs that yield a particular equal level of profits. This means that for any given level of profit, there is a corresponding iso-profit curve. The number of iso-profit curves is not finite and they do not necessarily correspond to zero economic profits. They are typically convex to the origin, but they are not necessarily strictly increasing.

Question 15

Fatality rates vary considerably from one industry to the next._______ is a particularly dangerous occupation while _______ is considerably safer.

Accepted Answer

Fishing is known for having one of the highest fatality rates due to the hazardous conditions at sea, while the service sector, encompassing jobs in areas like retail, education, and finance, typically has much lower fatality rates due to the nature of the work being less physically risky.

Question 16

In a hedonic wage model,heterogeneous workers and firms engage in positive assortative matching in equilibrium.Which of the following is an example of positive assortative
Matching?

Accepted Answer

In positive assortative matching, similar types are matched together. In this context, dangerous jobs are matched with brave workers, and safe jobs are matched with wimpy workers, reflecting a matching of similar traits.

Question 17

Hedonic pricing is NOT used to model:

Accepted Answer

Hedonic pricing is used to model the market value of non-market goods or services. It involves analyzing the characteristics of a good or service and how they affect its price. Therefore, it is not used to model the wage increase given to a worker with an additional year of education, as education is seen as a marketable skill and not a non-market good. Choices A through D are all areas where hedonic pricing can be applied.

Question 18

Assume that a job package is characterized by the pair (w,z)where w is the wage,and z is a single undesirable non-wage job attribute.All else equal,a firm's profit is _______ in
W and _______ in z.

Accepted Answer

A firm's profit is decreasing in w because higher wages increase costs. Profit is increasing in z because undesirable attributes may reduce costs or increase productivity.

Question 19

The slope of the indifference curve in a hedonic wage model is the marginal rate of substitution (MRS)between consumption and the non-wage job attribute.Economically, this MRS is:

Accepted Answer

The MRS in a hedonic wage model represents the compensation required for a worker to accept an increase in a non-wage job attribute, such as risk, which aligns with choice A.

Question 20

In a hedonic model,each worker's utility,u,depends upon his consumption,c,and a single job attribute,z.It is always true that z_______ in a hedonic model.

Accepted Answer

In a hedonic model, z represents a non-wage job attribute, such as the location or type of work, which can affect a worker's utility or satisfaction with the job. It is not necessarily desirable or undesirable, nor does it necessarily measure a worker's risk of physical injury. It can, however, be changed by the employer or the worker's choices.

Quiz 10: Death and Injury in the Usworkplace-A Hedonic Analysis

The value of a statistical life is defined as VSL=$B/S.What is the interpretation of B in this equation?

The total workplace injury rate _ from 1990 to 2000 and _ from 2000 onward.

In a hedonic model,each worker's utility,u,depends upon his consumption,c,and a single job attribute,z.If z represents fatality risk,risk averse individuals' indifference curves will:

The Occupational Health and Safety Act is charged with:

According to the Pelzman effect,agents respond to inherent improvements in safety by _ their own safety efforts.So,increases in workplace safety can potentially Cause _ in accidents.

What does the term hedonic mean when used in the phrase hedonic pricing?

Why will active government policy to increase workplace safety reduce overall welfare?

Let $B denote the maximum combined amount that a group of workers is willing to pay to implement safety policy X.What is the formula for calculating the value of a Statistical life,as defined by these workers?

Which of the following is NOT a plausible result of an increase in the generosity of benefit payments received under workers' compensation laws?

Under an experience-rated workers' compensation system,employers' insurance premiums increase with:

How do economists estimate the value of a statistical life?

Why are injury and fatality rates endogenously determined in the hedonic framework?

In the context of workers' compensation,the replacement rate is defined as:

Assume that a job package is characterized by the pair (w,z) where w is the wage,and z is a single undesirable non-wage job attribute.A firm's iso-profit curves:

Fatality rates vary considerably from one industry to the next._ is a particularly dangerous occupation while _ is considerably safer.

In a hedonic wage model,heterogeneous workers and firms engage in positive assortative matching in equilibrium.Which of the following is an example of positive assortative Matching?

Hedonic pricing is NOT used to model:

Assume that a job package is characterized by the pair (w,z) where w is the wage,and z is a single undesirable non-wage job attribute.All else equal,a firm's profit is _ in W and _ in z.

The slope of the indifference curve in a hedonic wage model is the marginal rate of substitution (MRS) between consumption and the non-wage job attribute.Economically, this MRS is:

In a hedonic model,each worker's utility,u,depends upon his consumption,c,and a single job attribute,z.It is always true that z_______ in a hedonic model.

Quiz 10: Death and Injury in the Usworkplace-A Hedonic Analysis

The value of a statistical life is defined as VSL=$B/S.What is the interpretation of B in this equation?

The total workplace injury rate _______ from 1990 to 2000 and _______ from 2000 onward.

In a hedonic model,each worker's utility,u,depends upon his consumption,c,and a single job attribute,z.If z represents fatality risk,risk averse individuals' indifference curves will:

The Occupational Health and Safety Act is charged with:

According to the Pelzman effect,agents respond to inherent improvements in safety by _______ their own safety efforts.So,increases in workplace safety can potentially Cause _______ in accidents.

What does the term hedonic mean when used in the phrase hedonic pricing?

Why will active government policy to increase workplace safety reduce overall welfare?

Let $B denote the maximum combined amount that a group of workers is willing to pay to implement safety policy X.What is the formula for calculating the value of a Statistical life,as defined by these workers?

Which of the following is NOT a plausible result of an increase in the generosity of benefit payments received under workers' compensation laws?

Under an experience-rated workers' compensation system,employers' insurance premiums increase with:

How do economists estimate the value of a statistical life?

Why are injury and fatality rates endogenously determined in the hedonic framework?

In the context of workers' compensation,the replacement rate is defined as:

Assume that a job package is characterized by the pair (w,z) where w is the wage,and z is a single undesirable non-wage job attribute.A firm's iso-profit curves:

Fatality rates vary considerably from one industry to the next._______ is a particularly dangerous occupation while _______ is considerably safer.

In a hedonic wage model,heterogeneous workers and firms engage in positive assortative matching in equilibrium.Which of the following is an example of positive assortative Matching?

Hedonic pricing is NOT used to model:

Assume that a job package is characterized by the pair (w,z) where w is the wage,and z is a single undesirable non-wage job attribute.All else equal,a firm's profit is _______ in W and _______ in z.

The slope of the indifference curve in a hedonic wage model is the marginal rate of substitution (MRS) between consumption and the non-wage job attribute.Economically, this MRS is:

In a hedonic model,each worker's utility,u,depends upon his consumption,c,and a single job attribute,z.It is always true that z_______ in a hedonic model.

The total workplace injury rate _ from 1990 to 2000 and _ from 2000 onward.

According to the Pelzman effect,agents respond to inherent improvements in safety by _ their own safety efforts.So,increases in workplace safety can potentially Cause _ in accidents.

Fatality rates vary considerably from one industry to the next._ is a particularly dangerous occupation while _ is considerably safer.

Assume that a job package is characterized by the pair (w,z) where w is the wage,and z is a single undesirable non-wage job attribute.All else equal,a firm's profit is _ in W and _ in z.