Suppose you are a risk-neutral manager attempting to hire a new sales manager. All of the workers in the market have the same ability to manage and sell, but they differ with respect to the wage at which they are willing to work for your company. The market for sales managers is composed of three types of individuals: 85 percent are willing to work for $75,000 and 15 percent are willing to work for $85,000. The first interviewee is only willing to work for $85,000. If the human resource director spends five hours interviewing each candidate and the opportunity cost of this director's time is $500, then the director should:
A. search again since the expected benefit of an additional search exceeds the cost.
B. stop searching since the expected benefit of an additional search is less than the cost.
C. stop searching since the expected benefit of an additional search exceeds the cost.
D. search again since the expected benefit of an additional search is less than the cost.
Answer: A
You might also like to view...
In terms of the aggregate demand and supply framework, a decrease in the money supply will shift the aggregate
A) demand curve to the right. B) demand curve to the left. C) supply curve to the left. D) supply curve to the right.
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the
a. demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. b. demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. c. supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. d. supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.
How would an economist characterize the decision to change brands when the price of one’s preferred brand increases?
a. disloyal b. rare c. rational d. unnecessary
Refer to the information provided in Figure 3.10 below to answer the following question(s).
Figure 3.10Refer to Figure 3.10. A decrease in the price of pizza sauce will cause a movement from Point B on supply curve S2 to
A. supply curve S1. B. supply curve S3. C. Point A on supply curve S2. D. Point C on supply curve S2.