1. In the hedonic pricing model of job risk, steep indifference curves indicate:
A. a higher level of risk aversion.
B. a lower level of risk aversion.
C. that the cost of risk reduction is relatively low.
D. None of the above is correct.
2. A reduction in the wage causes the opportunity cost of a vacation to the Bahamas to:
A. rise.
B. fall.
C. remain unchanged.
D. None of the above is correct.