The equilibrium hedonic wage function is most likely
A. horizontal as no firm will over-pay for workers.
B. horizontal as firms will choose their optimal level of safety.
C. a single point, as all firms will choose the same level of risk, and consequently all
workers will be paid the same wage.
D. upward sloping as firms that offer riskier jobs usually pay higher wages.
E. downward sloping as firms that offer riskier jobs are usually able to pay lower
wages.
The optimal efficiency wage requires
A. firms to pay the competitive wage.
B. firms to pay any wage above the competitive wage.
C. firms to pay the unique wage above the competitive wage such that the elasticity of
output with respect to wages equals one.
D. firms to pay fringe benefits.
E. the total product curve to be downward sloping.