When a firm moves from straight-time pay to commission orpiece-rate pay, the productivity of a firm's employees may A. increase as less productive employees leave and those who remain have an incentive to sell more. B. decrease as less productive employees leave and those who remain have no incentive to sell more. C. be affected as the employees assume lower risk for higher pay. D. fall as they assume more risk but and have no incentive to sell more.

When a firm moves from straight-time pay to commission orpiece-rate pay, the productivity of a firm's employees may A. increase as less productive employees leave and those who remain have an incentive to sell more. B. decrease as less productive employees leave and those who remain have no incentive to sell more. C. be affected as the employees assume lower risk for higher pay. D. fall as they assume more risk but and have no incentive to sell more.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter1: Introduction: What This Book Is About

Section: Chapter Questions

Problem 2MC

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Q) Suppose that utility for a worker is u(w)=w^.5. If the wage (w) offered is $64, there is a 50% chance of being fired, and switching costs are $28. What is the expected utility for the worker? Explain it early
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Before he can delegate, Manuel needs to train asubordinate. But Manuel believes that he will lose too much time ifhe teaches the subordinate, so he keeps doing the work himself. Asa result of ____, Manuel refuses to train the subordinate. uncertainty a high level of riskpropensity threatened self-interests different perceptions feelings of loss
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