Worker X is paid $20,000 more in a dangerous job than what Worker X could make in safe jobs.Worker X values the job characteristic of safety at $15,000.If the government makes Worker X's job safe and if safe jobs continue to pay their current wage,then,assuming markets are competitive and wages can easily adjust
A) Worker X will be $20,000 worse off.
B) Worker X will be $15,000 better off.
C) Worker X will be $5000 worse off.
D) Worker X will be $20,000 better off.

Question

Quizplus · Accepted Answer

Worker X values safety at $15,000 but is paid $20,000 more for accepting a dangerous job. If the job is made safe without changing the wage, Worker X loses the $20,000 danger premium but doesn't have to pay the $15,000 they value safety at, effectively making them $5,000 worse off than before.

Worker X Is Paid $20,000 More in a Dangerous Job