Determine the negotiate a wage increase, Managerial Economics

Assignment Help:

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?

 

 


Related Discussions:- Determine the negotiate a wage increase

Factors influencing the supply of a commodity, Factors influencing the supp...

Factors influencing the supply of a commodity a)         Own Price of the commodity There is a direct relationship between quantity supplied and the price so that the hig

Efficiency-wage theories of unemployment, EFFICIENCY-WAGE THEORIES OF UNEMP...

EFFICIENCY-WAGE THEORIES OF UNEMPLOYMENT   Efficiency wage  theories are clearly non-Walrasian theories in as much as they postulate  payment of  wages that  are  higher than m

Uses of indifference curve analysis, Uses of Indifference Curve Analysis ...

Uses of Indifference Curve Analysis Indifference curve analysis is useful when studying welfare economics as follows: They are used to indicate the amount of income and

Comparability principle, The comparability principle Associations repre...

The comparability principle Associations representing workers providing services - clerical, postal, teaching, etc. - have always attempted to  apply the "principle of comparab

Maximisation model, write a note on marris growth maximising model?

write a note on marris growth maximising model?

State the basis of business policies, State the Basis of business policies ...

State the Basis of business policies Managerial economics is the founding principle of business policies. Business policies are prepared based on studies and findings of manage

Quadratic cost function, Using the CD data estimate a quadratic cost functi...

Using the CD data estimate a quadratic cost function. Test the hypothesis that there is diminishing marginal cost. Be sure to state what critical value you are using. Then, using t

Income and substitution effects of price change, Income and Substitution Ef...

Income and Substitution Effects of Price Change When the price of a commodity falls the consumer's equilibrium changes.  The consumer can purchase the same quantity of X and Y

Direct taxes, DIRECT TAXES A direct tax is one where the impact and ...

DIRECT TAXES A direct tax is one where the impact and incidence of the Tax is on the same person e.g. Income Tax, death or estate duty, corporation taxes and capital gains

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd