Assume That a Worker Works 60 Hours a Week

question 11

Multiple Choice

Assume that a worker works 60 hours a week. He contributes an additional $90,000 to the firm's revenue and his personal disutility from the job is $35,000. If he is paid $58,000 per year, what is the net profit from this employment relationship?

• A) $32,000
• B) $35,000
• C) $55,000
• D) $34,000
• E) $23,000

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Definitions:

Net Present Value

A financial metric showing the value of all future cash flows related to an investment discounted back to the present time.

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Depreciated

The reduction in the value of an asset over time, typically due to wear and tear or obsolescence.

Tax Rate

The percentage at which an individual or corporation is taxed.