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$$