Scott is a manager at a pool cleaning business. He has hired 10 workers to clean pools for him and is considering what type of payment scheme he should set up for his workers
He can pay each of his workers $10 per hour to clean pools, or he can pay his workers $20 for each pool a worker cleans. (It takes 2 hours, on average, for an employee to clean a pool thoroughly.) If Scott wants to maximize the number of pools his workers clean in one day, which payment scheme should he use? Explain.
If Scott wants to maximize the number of pools his workers clean in one day, he should pay them $20 for each pool so that workers also will have an incentive to clean as many pools as possible. However, if the workers are rushing through cleaning pools, it is likely that the pools will not be cleaned as thoroughly.
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Which of the following statements is true?
A) There always exists some amount of unemployment in an economy. B) The unemployment in an economy normally increases at times of expansion and decreases at times of contraction. C) In almost every economy, each job opening is instantly filled by a qualified worker. D) The unemployment rate in an economy is constant over the long run.
The assumed goal of the firms that operate in each of the four market structures discussed in the text is to maximize:
A) sales. B) revenue. C) profits. D) price.
Which of the following best represents the law of demand?
A) As the price of a good decreases, the demand for the good increases. B) As the price of a good increases, the quantity demanded of that good decreases. C) As the demand for a good increases, the price of that good increases. D) As the price of a good decreases, the demand curve for that good shifts to the right.
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $6.00; AVC = $4.00; MC = $3.50; MR = $3.50. The firm should
A) increase output. B) increase price. C) remain at the same position. D) shut down.