1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Fynjy0 [20]
2 years ago
7

An employee of a firm has a job where the employee can easily adjust the number of hours they work for the employer per year. Th

e employee is currently paid $40 per hour and will work 2000 hours in 2018. The employer had a good year in 2018 and is considering two changes in the employee’s compensation for 2019.
a) Suppose the employer decides to raise the employees wage to $45 per hour. Explain why it is unclear whether the wage change will cause the employee to choose more or less work in 2019. (Note: The ability of the firm to change wages means this firm is not in a competitive labor market, but this has no impact on the worker’s decision) (1 point)

b) The other alternative the firm is considering is paying the employee a $10,000 bonus, but not changing the wage. Explain how this will change your answer to (a) about how much the employee works in 2019. Explain how it is possible both options cost the employer the same amount of money
Business
1 answer:
USPshnik [31]2 years ago
6 0

Answer:

The answer to both a and b is in the explanation below

Explanation:

a) The increase in wage can either decrease or increase the hours worked. This is became an increase in wage has both substitution effect and income effect that work in different directions. Substitution effect An increase in wage increases the opportunity cost of leisure, thereby making the worker increase number of hours worked. Income effect The increase in wage also makers the worker richer, thereby making the worker decrease number of hours worked.

Since no information about worker's preferences is given, we do not Imow which effect will dominate the other effect and, therefore, we do not know what the net impact of the increase in wage will be.

b) The bonus will only have income effect. The bonus will make the workers richer, thereby making the worker decrease number of hours worked.

If in part a), the substitution effect and income effect are equal in magnitude, then there will be no change in the number of hours worked. The number of hours worked will remain the same at 2000 hours. Since the employer would be paying $5 extra on each hour worked, the cost to the employer of increase in wage would be $10,000 (=2000 x $5), which is the same as the bonus in part b).

You might be interested in
A statewide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing a
STatiana [176]

Answer:

The correct answer is c. economies of scale.

Explanation:

The situation in which a company reduces its production expenses by expanding is called economy of scale. It is a situation in which the more it occurs, the cost that the company has to manufacture a product is lower.

There is a greater benefit for every extra unit we produce. This reduction in the cost of unit manufacturing is not reduced because the price of raw materials goes down, but to take advantage of a material that we have already bought and in which we invested money in the past.

Therefore, it occurs especially in situations in which the company buys more facilities. If we buy a machinery, the way to take advantage of it is to produce more since it is the way that we get a greater benefit, by taking advantage of the same machinery to produce more products, the unit cost of each product is lower. And we will get more benefit the more we produce. This benefit will be greater since we will not have to increase manufacturing costs since we have already had it before.

3 0
3 years ago
Who appoints the members of the given branch in the United States?
german
T<span>hree parts. They are the </span>Executive,<span> (President and about 5,000,000 workers) </span>Legislative<span> (Senate and House of Representatives) and </span>Judicial<span> (Supreme Court and lower Courts).</span>
5 0
3 years ago
Read 2 more answers
Allen’s ark sells 2000 canoes per year at a sales price of 460
NNADVOKAT [17]

Answer:

well, sell 2000 canoes per year at 460.... and de rest?

3 0
3 years ago
The bonds issued by United Corp. bear a coupon of 6 percent, payable semiannually. The bond matures in 20 years and has a $1,000
pishuonlain [190]

Answer: 6.40%

Explanation:

Use Excel to calculate this by the formula;

= RATE(Nper,Pmt,-Pv,Fv)

Nper is number of periods = 20 * 2 = 40 semi annual periods

Pmt is the payment = $6%/2 * 1,000 = $30

Pv is the present value = $955

Fv is future value or face value = $1,000

= RATE (40,60,-955,1000)

= 3.20% * 2 (because this is a semi annual rate)

= 6.40%

8 0
2 years ago
A stability strategy is a grand strategy that involves little or no significant organizational change. For example, Love Forever
In-s [12.5K]

Answer:

The correct answer is letter "A": True.

Explanation:

Stability strategies are those in which the firm does not change its core method of working, thus, it remains to focus on its current products and markets. Carrying out stability strategies is a less risky approach. The types of stability strategies can be <em>no-change strategy; profit strategy; </em><u><em>and</em></u><em> growth through concentration, integration, diversification, co-operation, internationalization.</em>

6 0
3 years ago
Other questions:
  • Luther Industries currently has 5 million shares outstanding and its stock is currently trading at $40 per share. Assuming Luthe
    5·1 answer
  • Consider the expenditures listed below and classify each of the expenditures as a capital expenditure or a revenue expenditure r
    7·1 answer
  • Your sister recently opened a swanky three-floor cheese market, Fromagerie, which is quickly gaining attention from locals, the
    10·2 answers
  • Jorge, a forklift truck operator for the retail chain Hanes Ridge, was injured when the forklift he was operating toppled over.
    15·1 answer
  • The bank statement for Tetra Company contained the following items: a bank service charge of $10; a credit memo for interest ear
    13·1 answer
  • Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 14 direct labor-hours at $16
    6·1 answer
  • In the past there have been violent protests against the World Bank and the World Trade Organization. The protesters argued that
    9·1 answer
  • The people described spent their money during different time periods. Label each of their scenarios as to whether they bought th
    8·2 answers
  • Angelica (23 years old) studied dance in college and graduated a year ago. She currently works as a dance instructor at a high s
    15·1 answer
  • positive economics ______ value judgments, tries to establish ______ statements about economic behavior, and deals with ______ e
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!