Peter Was Recently Hired as a Salesman for a National

question 441

Multiple Choice

Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. His firm is paying him a wage that is higher than the equilibrium wage, but he receives much of his income in quarterly bonuses based on how much he sells.

• A)The consulting firm is trying to prevent adverse selection with its compensation strategy.
• B)Peter has an incentive to go golfing with his buddies rather than conducting sales meetings.
• C)The consulting firm is responding to the moral hazard problem with its compensation strategy.
• D)Peter should quit this job and take a job where he gets paid an equilibrium wage more frequently.

Identify characteristics of effective business messages.

Comprehend the role of professionalism and etiquette in business communication.

Grasp the audience-centered approach in business communication.

Acknowledge the ethical considerations in business communication.

---

Definitions:

Distribution

Payments made from a fund or account, often referring to dividends (company profits) paid to shareholders or withdrawals from retirement accounts.

Employer-Sponsored

A program or benefit provided by an employer to its employees, often including health insurance, retirement plans, and educational assistance.

Roth IRA

An individual retirement account allowing contributions to grow tax-free, with qualified distributions also being tax-free.

Single Life Annuity

A type of annuity that only provides payments for the remainder of an individual's life, ceasing upon their death.