What prevents a firm from offering a delayed-compensation scheme to its employees and then firing each worker when the worker's wage exceeds his or her value of marginal product?
A. Profits would increase by allowing the worker to continue on.
B. The firm would lose the trust of the workers, and new workers would not accept the payment scheme.
C. Firms that offer delayed-compensation schemes are legally barred from firing workers.
D. Profits are insensitive to when the worker quits his job.
E. The worker will have already retired by the time the worker's value of marginal product exceeds his or her wage.
Answer: B
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For a firm in monopolistic competition, the efficient scale is the amount of output at which ________ is a minimum
A) fixed cost B) average total cost C) average variable cost D) average fixed cost E) marginal cost
Suppose the market-clearing price of milk is $3.00 per gallon, but consumer groups persuade the government to set and enforce a maximum price cap at $2.00 per gallon. The newly legislated price tends to
A) create a surplus of milk. B) increase the demand for milk. C) reduce the supply of milk. D) do all of the above. E) do none of the above.
When you buy a hamburger for lunch, you are using money as a
A) store of value. B) standard of deferred payment. C) medium of exchange. D) unit of accounting.
You are in the business of producing and selling hamburgers, french fries, pizza, and ice cream. The mayor plans to impose a tax on one of these products
Based on the elasticities in the above table, as a profit-minded business person who seeks to avoid taxes whenever possible, which good would you least like to have taxed? A) hamburgers B) pizza C) French fries D) ice cream