Suppose a Government Seeks to Reduce the Extent to Which

question 5

Multiple Choice

Suppose a government seeks to reduce the extent to which firms have their workers put in overtime hours. Which of the following would be ineffective?

• A) Reducing the absolute maximum number of hours that any worker can work
• B) Granting workers the right to refuse overtime
• C) Decreasing the overtime wage premium
• D) Reducing the length of the standard work week beyond which an overtime premium must be paid
• E) All the choices would have the desired effect

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Definitions:

Indirect Expenses

Expenses that are not directly tied to the production of goods or services, such as administrative and marketing costs.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing to covering fixed costs and generating profit.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much revenue is contributing to fixed costs and profits.

Indirect Expenses

Costs that are not directly traceable to a specific cost object, such as overhead costs for running the business.