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  3. a. refer to figure 1. in this figure, the market

A. Refer to Figure 1. In this figure, the market envelope offers wage-safey...

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Accounting

A. Refer to Figure 1.
In this figure, the market envelope offers wage-safey combinations with wages between $0
and 5
0
and 7
(Enter lower value betore higher value).
Based on this figure we expect the more risk-awarse individual to be employed with wage $3
and safety level
The less risk-averse indwidual will have satay reduced by 3
relative to the risk-averse
individual and in compensation will be paid $
more. The (absolute) slope of the wage-safety
locus is 1
B. Refer to Figure 2
show thme Remanns
At the threat point, the union's payoff is
and the firm's payoff is
The point A has product of gains equal to 2
If there is only one round of bargaining, this
point
(Enter " for "15", Ofor "may or may not be",2 for "is not") a Nash solution.
If there are multiple rounds of bargaining and the firm makes the first offer, the Rubinstein outcome will give union
payoff
and firm payof
image

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