Chapter 8

Compensating Wage Differentials and Labor Markets

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FIGURE 8.1 A Family of Indifference Curves between Wages and Risk of Injury

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FIGURE 8.2 Representative Indifference Curves for Two Workers Who Differ in Their Aversion to Risk of Injury

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FIGURE 8.3 A Family of Isoprofit Curves for an Employer

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FIGURE 8.4 The Zero-Profit Curves of Two Firms

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FIGURE 8.5 Matching Employers and Employees

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FIGURE 8.6 An Offer Curve

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FIGURE 8.7 The Effects of Government Regulation in a Perfectly Functioning Labor Market

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FIGURE 8.8 A Worker Accepting Unknown Risk

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FIGURE 8.9 An Indifference Curve between Wages and Employee Benefits

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FIGURE 8.10 An Isoprofit Curve Showing the Wage/Benefit Offers a Firm Might Be Willing to Make to Its Employees: A Unitary Trade-Off

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FIGURE 8.11 Alternative Isoprofit Curves Showing the Wage/Benefit Offers a Firm Might Be Willing to Make to Its Employees: Nonunitary Trade-Offs

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FIGURE 8.12 Market Determination of the Mix of Wages and Benefits

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FIGURE 8A.1 Choice of Hours of Work

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FIGURE 8A.2 The Choice between H' Hours with Certainty and H' Hours on Average