Let's re-apply Figure 5.3 to illustrate the market forriskyjobs. An innovation reduces the cost of making a job safe. What happens to reservation wages on each side of the market? Does the innovation increase or decrease the demand for labor on risky jobs? Does the innovation raise or lower the wage premium associated with risky work?

is more averse to the risk of injury on the job: Molly, Nora, or neither? (d) Consider the job choices of Molly and Nora. Molly works on job and Nora works on job The figure below illustrates two jobs, A and B, on a hypothetical wage-risk curve. wage ($K/year) LW ( ? ) 40.3 40.0 39.7 0 1 2 3 4 5 6 7 8 9 10 risk (deaths/100,000 worker-years)