Microeconomics (7th Edition)
Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 17, Problem 17.5.7PA
To determine

Issue of personnel economics.

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Are the following statements correct or incorrect? Briefly explain:               a.                When making the hiring decision, a rational producer should always relay on both the average product of labour and the marginal product of labour.
According to the Economics Policy Institute (Mishel and Wolfe, 2019) CEO pay has grown 940% since 1978 while the compensation of the average worker has only risen 12%. While you can easily find sources that provide statistics that conflict with these numbers, you would be hard pressed to find any credible source that refutes the idea that the rate of pay of CEO’s and other upper-level managers has not dramatically increased relative to an organization’s lower-level employees in just about any 10 or more year period over the past 60 years. In the world of Adam Smith, the “invisible hand” of the free market capitalistic model would address inequities/out of balances. Are the forces represented by the “invisible hand” working? Why or why not? Is there an ethical dimension to the discussion of upper-level manager compensation? Why or why not? How does (or does it?) levels of pay of upper management impact the rest of us commoners?
does a gap between the average earning of between of men and women, or between whites and black, prove that employers are discriminating in the labor market? Explain briefly. In this context also examine the following: In 2007 the president of the University of the Southern of California was paid $900,000 and the football coah was paid $ 4 million. Dos it makes any  sense?

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Microeconomics (7th Edition)

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