Predictable layoffs
A) will not increase utility for any workers.
B) decrease utility of all workers.
C) decrease utility of risk-averse workers.
D) imply that leisure is an inferior good to all workers.

Question

Quizplus · Accepted Answer

Predictable layoffs reduce job security and increase the risk of unemployment, which decreases the utility for risk-averse workers in particular. Other workers may also experience a decrease in utility, but it may vary depending on their individual preferences and attitudes towards job security and risk. Therefore, option C is the best choice.

Predictable Layoffs