03 Jun Question Labor Economics – Chapter 8 – Compensating Wage Differentials Homework Assignment
Question
Labor Economics – Chapter 8 – Compensating Wage Differentials
Homework Assignment
1. Show that in a labor market with perfect information and mobility, OSHA safety regulations that mandate lower risk levels could make some employees worse off and put some firms out of business.
2. Companies that produce asbestos have been in court for years fighting wrongful death lawsuits because asbestos is now known to cause cancer. It does not cause problems immediately, but cancer cases start to appear 20 years after a significant exposure. For a while the companies were not held liable because they successfully argued that all parties to the employment relationship were acting on the information that was available when the workers were exposed. They started to lose the suits once it was revealed
that they had concealed information about harmful effects of asbestos. Explain, as an expert witness economist would, why this revelation is crucial to an economic argument that the exposed workers should be compensated. Illustrate your argument with an appropriate graph.
3. Employees pay for their own employee benefits. Answer true, false, or uncertain and give a solid economic explanation of your answer.
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