Jim Smith Runs a Company That Sells Encyclopedia Sets for $200

question 26

Multiple Choice

Jim Smith runs a company that sells encyclopedia sets for $200 each. When he employs 5 workers, they can sell 20 sets per week, while only 17 sets are sold when 4 workers are employed. If the wage of workers in this skill category is $500 per week, should the fifth worker be hired?

• A) No, because the MRP of the fifth worker is less than $500 per week.
• B) No, because the MRP of the fifth worker is more than $500 per week.
• C) Yes, because the MRP of the fifth worker is less than $500 per week.
• D) Yes, because the MRP of the fifth worker is more than $500 per week.

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Definitions:

FLSA

The Fair Labor Standards Act, U.S. legislation that sets standards for minimum wage, overtime pay, and child labor protections.

Exempt Status

A classification under labor laws that categorizes employees who are exempt from overtime pay and/or minimum wage requirements, typically based on the type of work they perform.

Job Responsibilities

Specific duties and tasks that an employee is expected to perform as part of their role within an organization.

Davis-Bacon Act

A United States federal law that requires paying the local prevailing wages on public works projects for laborers and mechanics.