A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20% to 70% but would cost him $5 . If the average price of shoes is $100, what is the minimum commission rate would induce him to work hard?
a. 4%
b. 6%
c. 8%
d. 10%
d
You might also like to view...
What is public choice theory?
What will be an ideal response?
Have unions been successful at raising wages for their members? What about raising wages for all workers?
What will be an ideal response?
Keynesian economists argue that monetary policy works through its effects on:
a. interest rates and investment. b. price- and wage-flexibility. c. budget deficits and trade deficits. d. the spending and money multipliers.
Economists view shifts of supply and demand as
a. unusual events that call for government intervention b. unusual events resulting from the failure of the price to fall c. normal and frequent events d. normal and frequents events that do not affect equilibrium prices e. normal and frequent events that result from government intervention