Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 10, Problem 14PAA
To determine
To find:
The option which makes an executive better off.
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Saniya runs a hotel in Almaty. A union announces that it will strike unless she raises the workers’ pay. The strike would cost her $1000 in lost revenues; the pay raise would cost only $800. Should she agree to raise pay? Explain.
A craft chocolate producer considers hiring one extra worker in production. Currently, the shop is selling 200 chocolate bars per day at a price of $6. With one extra worker, the manager estimates that they would be able to increase the output to 250 chocolate bars per day and that they would need to lower the price to $5.50 in order to sell them. The daily salary of this new employee would be the same as for the existing ones: $150. What should the manager do?
Group of answer choices
Reduce the number of workers working in his chocolate place
Increase its selling price
Turn down the new worker and maintain the same number of employees
Increase the salary of all employees
Hire the extra worker
Boeing created, and recently expanded, an airplane manufacturing center in Charleston, South Carolina. One of the factors that likely influenced this location decision is that South Carolina is a "right to work" state. This represents
a) a place factor related to labor.
b) a transportation factor related to the market.
c) higher wages for Boeing workers in South Carolina relative to Washington.
d) a place factor related to the political environment.
Chapter 10 Solutions
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
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- “Managing pay in organisations is easy. You simply pay each person the going rate for doing their job.” To what extent do you agree with this view? Justify your answerarrow_forwardSay the average increase in pay for non-union workers in 2011 is 2% across the U.S. If a workers' union successfully negotiates a 3-year collective agreement that provides a 4.5% raise in 2011, and a 4.3% raise in 2013, then the for-profit employer will typically Question 42 options: begin to fire its older union workers. replace union workers with non-union workers. curtail expansion of labor as a trade-off. replace union workers with foreign workers.arrow_forwardA meeting of representatives for labor and management to negotiate contracts is calledarrow_forward
- A carpenter quits his job at a furniture factory to open his own cabinetmaking business. In his first two years of operation, his sales average $100 000 per year and his operating costs for wood, workshop and tool rental, utilities, and miscellaneous expenses average $70 000 per year. Now his old job at the furniture factory is again available. What is the lowest wage at which he should decide to return to his old job? Why?arrow_forwardposition about Salaries of uninformed personnel have to be the same with that of teachers and educational staffsarrow_forwardtrue or false Labor unions are organized primarily to help women who are expecting to go into labor while on the job.arrow_forward
- Sixty days before the existing contract expires, the parties to a collective bargaining agreement must provide notification to the National Labor Relations Board that they intend to negotiate a new contract. True Falsearrow_forwardDistinguished labor standard from labor relations.arrow_forwardWould the owner of a profit-maximizing clothing store hire another worker for $85 per day if the additional worker added faster service, increasing sales and revenue by $97 per day? Why or why not? Explain your answer.arrow_forward
- Wages are the major element of cost in the economy accounting for about 70 percent of all input costs. True or Falsearrow_forwardAssume a firm incurs overall labor costs of $22 per hour- which includes wages and training costs. Unit training costs equals $160/h and the wage equals $20/h. How many firms are there?arrow_forwardOrientation is the human resources function that: pick one Question 2 options: Occurs after the employee is on the job for several months Includes tours, introductions, and socialization Is okay to omit Provides on-the-job training Develops equal pay informationarrow_forward
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