Principles Of Economics, Student Value Edition Plus Mylab Economics With Pearson Etext -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134419381
Author: CASE
Publisher: PEARSON
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Chapter 18, Problem 3.6P
To determine
Identify the concept of executive compensation.
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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?
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Q49
In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. The marginal revenue product of the second worker is
Multiple Choice
$9
$15
$24
$8
$14.
Q33
In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital and finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. Justin Trudeau product sells for $3 per unit, and the wage rate is $13 per worker. The marginal product of the second worker is
Multiple Choice
32
14.
8
1
5
Chapter 18 Solutions
Principles Of Economics, Student Value Edition Plus Mylab Economics With Pearson Etext -- Access Card Package (12th Edition)
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