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When Ford purchased Volvo AB's car division in 1999, they had to decide what to do about the differences in the fringe benefits received by the employees. Although Ford plants have fitness centers, these centers do not have the amenities offered at the Volvo plants such as Olympic-size pools, badminton and tennis courts, tanning beds, and saunas. One reason for the high level of fringe benefits at Volvo is the extremely high tax rates in Sweden. Company- supplied services such as plush health facilities are not taxed by the government. However, Ford employees in the United States might be tempted to argue for "perk parity" especially during union contract negotiations.31Suppose UAW negotiations argue for upgraded perquisites for Ford's U.S. employees to match those available in the Swedish plants Ford acquired from Volvo.
a. Ford might achieve perk parity by upgrading U.S. facilities or by reducing Swedish facilities. What would be the implications of each policy?
b. Ford might live with different levels of perks. What would be the implications?
c. Suppose the difference in perks between U.S. and Swedish employees is reduced fol- lowing the merger. What are the efficiency implications for the merger?
Calculate the marginal and average variable product of each unit of labor input and calculate total, average total, average variable, and marginal costs.
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However, another flavor, Cherry Garcia, contains sulfur dioxide preservatives, and other flavors use margarine, not butter. What are the problems a firm faces if it is "politically correct" in some products but not others?
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Roommates: Two roommates each need to choose to clean their apartment, and each can choose an amount of time ti ≥ 0 to clean. If their choices are ti and tj , then player i’s payoff is given by (10 − tj )ti − ti ^2 i and j are subscripts.IESDS is ite..
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Long distance telephone service has become a competitive market. The average cost per call is $0.05 a minute, and it's declining. The likely reason for the declining price for long distance service is:
1.For what reasons might the price of foreign holidays rise? In each case, identify whether these are reasons affecting demand, supply, or both.
Provide a cost-benefit analysis for a company which has to decide whether to hire more staff or hire temporary workers to meet production.schedules. Determine how managers would use your cost-benefit analysis to make this decision.
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