number 1 plz as quick ECON 244 Labor Economics Fall 2017 Assignment 4 1. Conside

Question

number 1 plz as quick

ECON 244 Labor Economics Fall 2017 Assignment 4 1. Consider two labor markets: unlike the "risky" labor market, the "safe" labor market provides safe workplaces. Let denote the compensating wage differential. Demand for workers in the risky sector is LDrish-1000-A. The corresponding supply is Lsisky-½A. For safety reasons, the government restricts the maximum number of workers in the risky sector to 200. How large is the wage differential in equilibrium if (i) many firms compete for workers,ii) only one firm is operating in the risky sector? 2. Assume that jobs are identical along all dimensions except risk of injury. The following figures depict indifference curves for two workers A and dollars dollars UJ economics...fLabor pLabor economics ALabor economics....pdf A

Explanation / Answer

1(i) When many firms compete: Ld(risky)=Ls(risky) So, we get 1000-delta= 1/2delta,

that is, 3/2 delta=1000 or Delta= (1000*2)/3=666.

(ii) When only one firm is operating: Ls=200( as given), that is, 1/2 delta=200, delta=400.

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