Suppose there are two types of jobs in the lobar market: "safe" jobs and risky jobs. Describe
i) how the worker decides whether to accept a safe job (where she cannot be injured) or a risky job (where she will certainly be injured).
ii) how the firm decides whether to offer a safe working environment or a risky environment.
b) There are two types of farming tractors on the market, the FT250 and the FT500.Over their lifetime, one in ten FT250s is expected to result in an accident, as compared to one in twenty-five FT500s. Further, one in one-thousand FT250s is expected to result in a fatal accident, as compared to only one in five-thousand FT500s. The FT250 sells for $125,000 while the FT500 sells for $137,000. At these prices, 2,000 of each model are purchased each year. What is the statistical value farmers place on avoiding a tractor accident? What is the statistical value of a life of a farmer?