1. Calculate the incentive for firms to violate the law if the firm has 10 potentially unionized employees if (U0? U1) is 0.12 and if it is 0.3. Assume (?n? ?u) = $45,000, F=$6,000, and p=1.

2. Calculate the incentive for firms to violate the law if F = $3,000. Explain the role of fines on the likelihood of violations of these public policies within the quantitative approach and how would you use public policy to get firms comply using the approach noted in this problem?

Hint: Net Expected Benefits from Illegal Activity is (U0? U1)(?n? ?u) ? pF

Firm engages in illegal activity if net expected benefit is positive. See class notes.

1. Calculate the incentive for rms to violate the law if the rm has 10 potentially unionized employees if (U0- U1) is 0.12 and if it is 0.3. Assume Or"- at") = $45,000, F=$6,000, and p=1. 2. Calculate the incentive for rms to violate the law if F = $3,000. Explain the role of nes on the likelihood of violations of these public policies within the quantitative approach and how would you use public policy to get rms comply using the approach noted in this problem? Hint: Net Expected Benets from Illegal Activity is (Uo- Ulla"- 7r\") - pF Firm engages in illegal activity if net expected benet is positive. See class notes