Author Question: A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would ... (Read 94 times)

Tazate · **on:** Jul 1, 2018

A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20 to 70 but the effort would cost him 5 . If the typical commission on a pair of shoes was 8, would he decide to work hard?
a. Yes because it is higher than what it costs him in effort
b. Yes because it is higher than zero
c. No, because it costs him more in effort
d. None of the above

Question 2

Total costs increase from 1500 to 1800 when a firm increases output from 40 to 50 units. Which of the following are true?
a. FC = 100
b. MC=300
c. MC=30
d. FC = 400