a The worst jobs pay $1,200 per month and the probability of being offered this type of job is 0.05. What is the expected value of Bettina's future job offer? (5 points for calculation, 3 points for explanation) What is the hazard rate? (3 points for calculation, 2 points for explanation) Problem 2. Compensating Wage Differentials: Income versus Paid Vacation (20 points) Imagine a labour market where workers care about only two aspects of their compensation when choosing employers: wages and paid vacations. m: this question is like the wage~safety problem. Using a carefully labelled diagram, describe the relationship between wages paid by firms offering longer paid vacations and those offering shorter vacations. In your diagram, please assume there are three firms in the same industry but differ in their business models and three workers that differ in their preferences. (5 points for diagram, 5 point for explanation) The government is considering imposing a requirement that all firms offer a minimum of four weeks of paid vacation to their employees. Using neoclassical assumptions about worker rationality and preferences, what impact will this regulation have on some of the workers and firms? Please draw a separate diagram to illustrate this. What would happen to wages? (5 points for diagram, 5 point for explanation) Problem 3. Decision-Making About Human Capital Investment and Migration (20 points) Yasmin Jamieson is 18 years old and is about to graduate from an Ottawa high school. She must decide: which university will she attend in September? She wants to follow a 4year undergraduate degree in Economics. Yasmin has been accepted to attend McMaster University in Ontario, Canada, and Stanford University, California, United States. She faces only one annual cost for the each of the four years she is in university: tuition. Annual tuition at McMaster is $15,000. At Stanford, annual tuition is $45,000. Assume that she is not considering the option of working after high school. Therefore, do not consider the foregone labour earnings when going to university. After graduation, Yasmin has a strong interest in Labour Economics and hopes to receive job offers from Capital Economics (near Hamilton, Canada) and from insight Economics (near Stanford, USA)