Companies often find it to be more profitable to use a commission or piece-rate system of compensation rather than a salary system, yet many firms continue to pay their workers salaries
List three reasons why a firm would choose a salary system of compensation.
1 ) Firms may find it difficult to attribute output to a particular worker. 2 ) Firms may be concerned that quality will suffer if does not use a salary system of compensation. 3 ) Workers may dislike the financial risk associated with a commission or a piece-rate compensation system.
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The practice of making choices using generalizations based on observable characteristics like race, gender, or age is called:
A. discrimination. B. means-testing. C. conditional cash transfers. D. None of these is true.
Pure public goods involve positive externalities.
A. True B. False C. Uncertain
If a person is going to pay $500 per month every month for 5 years, what do you know about their car loan (if the interest rate is positive)?
A. The loan amount was exactly $30,000. B. Nothing. C. The loan amount was more than $30,000. D. The loan amount was less than $30,000.
If a negative externality is to be internalized to the decision maker, the:
A. consumer of the good should pay a tax equal to the marginal benefit to those outside the trade that results from consuming the good. B. producers' marginal costs should be reduced by an amount equal to the marginal cost to those outside the trade that results from production of the good. C. producers' marginal costs should be increased by an amount equal to the marginal cost to those outside the trade that results from production of the good. D. consumer of the good should receive a subsidy equal to the marginal cost to those outside the trade that results from production of the good.