Determine the negotiate a wage increase, Managerial Economics

Mark works for Maple Feel Inc., which exports maple syrup to Slovakia. Currently, he generates $60,000 a year of net revenues for the firm and his salary is $60,000 per year. Mark is planning to hire a teacher to learn some Slovak. His only cost would be the teacher's fee of $50 per hour. Mark expects that if he devotes H hours to the study of the Slovak language, his ability to generate sales in Slovakia will increase to $60,000 + $1,400H1/2 per year. Mark will retire after one more year of working.

(a) Suppose there are many similar companies trying to export goods to Slovakia and in each of them Mark's knowledge of the Slovak language would be equally useful as in Maple Feel. How many hours will he devote to learning Slovak?

Now suppose Maple Feel is the only company in which Mark's knowledge of Slovak could be useful and that Mark's bargaining power is such that he could negotiate a wage increase equal to 20% of the gains from his increased productivity.

(b)  How many hours will Mark devote to learning Slovak if he bears all of the costs of his study?

(c) Suppose the company agrees to subsidize Mark's learning. How much of the $50 hourly fee will be paid by the company if they want Mark to study the efficient number of hours?

 

 

Posted Date: 2/28/2013 2:27:53 AM | Location : United States







Related Discussions:- Determine the negotiate a wage increase, Assignment Help, Ask Question on Determine the negotiate a wage increase, Get Answer, Expert's Help, Determine the negotiate a wage increase Discussions

Write discussion on Determine the negotiate a wage increase
Your posts are moderated
Related Questions
Management Decisions: An effective demand forecast assists the management to take suitable steps in factors which are relevant to decision making like plant capacity, raw-material

Menu Costs   Why do firms not change their prices very  frequently? Obviously, the costs of changing prices at  frequent intervals and in small amounts must be more  than the b

Generate a computer code to simulate the following solidification situation during a casting process: The material is a well-known polymer known as PEEK (polyetheretherketo

Q. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr

“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.

Legal Sanction: A monopoly as stated above may be the result of a government sanction. The government of a country may legally permit a private monopoly or monopoly in the public s

Rationing of Credit As an instrument of credit control credit rationing was first employment by the bank of England toward the end of the eighteenth century when it imposed a c

what are the examples of the types of elasticity (price,income & cross elaticity

Given a saving function of S = -25 + .2Yd, a $10 billion enhance in government spending will bring about how many dollars of change in consumption?

Q. Development of Skilled Labour - External Economies? As the industry grows training facilities for labour will increase. This helps development of skilled labour that would i