Steve,Harry,and Chris,who Own and Operate a Family Auto Parts Store,are

question 22

Multiple Choice

Steve,Harry,and Chris,who own and operate a family auto parts store,are experiencing tough times during a downturn in the local economy.To help the store survive these conditions,the brothers agree to each take a 25 percent reduction in salary for a one-year period.This decision:

• A)demonstrates a weakness of financial management.
• B)illustrates an important advantage of a family business.
• C)reveals a lack of customer orientation in a family business.
• D)reflects a lessening of entrepreneurial ambition in second-generation businesses.

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Definitions:

Human-capital Investment

The process of acquiring and enhancing an individual's skills and knowledge, which increases potential productivity and earnings.

Discrimination

Unfair treatment of individuals based on characteristics such as race, gender, or age, rather than merit or performance.

Wage Differentials

The variation in wage rates due to factors such as occupation, industry, location, or the skills and experience of workers.

Labor-market Discrimination

The unfair treatment of workers based on characteristics such as race, gender, age, or religion, rather than job qualifications or performance.