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77julia77 [94]
3 years ago
14

Free rider problems are everywhere. For example, some restaurants let each food server keep his or her own tips. Other restauran

ts require all of the food servers to put their tips into a tip pool, which then gets divided up equally among all of the servers. Let’s think about how the tip pool changes the server’s incentive to be nice to the customer.
a. Let’s assume that a server can be "nice" and earn $100 in tips per shift, or be "mean" and earn $40 in tips per shift. If an individual server goes from being mean to being nice, how much more will he or she earn in a non-tip-pooling world?

Gains from being "nice": $ -----------------------

b. Now let’s look at incentives in a tip pool. If all the servers are mean, how much will the average server earn? If all the servers are nice, how much will the average server earn?

Average mean server earnings:$ ----------------

Average nice server earnings: $ ----------------

What’s the change in tips per server if all of them switch from being mean to being nice?

Change in tips per server: $ --------------

c. But in the real world, of course, each server makes his or her own decision to be mean or nice. Suppose that you are on a shift with 9 other servers, and some servers are being nice and others are being mean. You’re trying to decide whether to be nice or mean. What’s the payoff to you if you switch your behavior from mean to nice?

Individual payout of becoming nice: $ ---------------

d. So when are you most likely to be nice: When you’re in a tip pool or when you keep your own tips?

1-You are more likely to be nice when you keep your own tips.

2-You are equally likely to be nice in either tip arrangement.

3-You are more likely to be nice in a tip pool.

If the restaurant cares a lot about keeping its customers happy, which policy will it follow?

1-The restaurant will use a tip pool.

2-The restaurant will let servers keep their own tips.

3-The restaurant is indifferent between the two tip arrangements because it generates the same likelihood of servers being friendly.
Business
1 answer:
Gennadij [26K]3 years ago
4 0

Answer:

Check the explanation

Explanation:

a. Gains from being nice = $60

reason: outcome for being nice = $100; outcome for being mean = $40 So the gains from being nice = 100 - 40 = 60

b. Average mean server earnings = $40 (given)

Average nice server earnings = $ 100 (given)

  Change in tips per server if all of the servers switch from being mean to being nice = $60 (100 - 40)

c. Individual payoff of my becoming nice = $6

reason: Total number of servers = 10

Change to the tip pool with my change in behavior from mean to nice = $60

My share in this change = 60/ 10 =6

d.  1-I am more likely to be nice when I keep my own tips.

reason: I can keep $100 if I am nice. But in a tip pool, some of the others may be mean. This will bring the pool amount lower, thereby my share may be less than $100. So I prefer to keep my own tips.

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8 0
2 years ago
At the beginning of the period, the Cutting Department budgeted direct labor of $52,350 and supervisor salaries of $42,150 for 3
xxTIMURxx [149]

Answer:

$77,000

Explanation:

Direct Labor = $52,350 (Its varies with the number of Production hours). Hence, $52,350   for 3,490 hours

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3 years ago
7) Suppose the real exchange rate is 10, the domestic price level is 8, and the foreign price level is 4. (a) What is the nomina
konstantin123 [22]

Answer and Explanation:

The computation is shown below:

1. Nominal exchange rate is

= (Real exchange rate) × (foreign price level ÷ domestic price level)

= 10 × (4 ÷ 8)

= 5

2. Change in Nominal exchange rate is

Change in  Nominal exchange rate = (real exchange rate change )  + foreign inflation - domestic inflation

= 10 + 4 - 6

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3.) foreign inflation rate

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4 0
2 years ago
Year P (bikinis) Q (bikinis) P (Speedos) Q (Speedos)
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Answer:

$2,950

Explanation:

assuming that year 2000 is the base year:

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4 0
3 years ago
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Answer:

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Explanation:

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7 0
3 years ago
Read 2 more answers
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