Suppose that the salary range for recent college graduates with a bachelor's degree in economics is $30,000 to $50,000, with 25 percent of jobs offering $30,000 per year, 50 percent offering $40,000 per year and 25 percent offering $50,000 per year and that in all other respects, the jobs are equally satisfying. Assume that in this market, a job offer remains open for only a short time so that continuing to search requires an applicant to reject any current job offer. If this scenario describes job searches in general, the segment of the population that is most risk-averse will tend to earn:
A. average salaries.
B. stable salaries.
C. below-average salaries.
D. above-average salaries.
Answer: C
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Consider the straight-line demand curve illustrated in the figure above. At a price of $6, demand is
A) inelastic. B) elastic. C) unit elastic. D) More information is needed to determine if the demand is elastic, unit elastic, or inelastic.
In the United States, which of the following safety precautions has the government NOT taken to reduce Bank failures?
A) implemented deposits insurance B) bank reserve requirements C) capital requirements and asset restrictions D) required bank examination E) forcibly closing poorly run banks
Mutual interdependence applies to actions of
a. monopolistic competitors b. oligopolists c. perfect competitors d. monopolists and oligopolists e. only oligopolist firms operating in different industries
In the 1990's Ireland made unemployment benefits less generous. This change would likely have reduced
a. both structural unemployment and the natural rate of unemployment. b. structural unemployment but not the natural rate of unemployment. c. both frictional unemployment and the natural rate of unemployment. d. frictional unemployment but not the natural rate of unemployment.