Problem 1: Estimate the benefits from increasing the protection for 50,000 powerplant workers. Average hourly wage ($) = $10 + 20 * probability of death on the job a. What is the MWTP for a 1% reduction in the probability of death on the job? Explain your approach. b. Suppose that the probability of death on the job is 0.05. What are the benefits of a safety program that reduces the probability of death by half? Explain.

Problem 1: Estimate the benefits from increasing the protection for 50,000 powerplant workers. Average hourly wage ($) = $10 + 20 * probability of death on the job a. What is the MWTP for a 1% reduction in the probability of death on the job? Explain your approach. b. Suppose that the probability of death on the job is 0.05. What are the benefits of a safety program that reduces the probability of death by half? Explain.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.9P

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