Why Might a Large Firm Actually Be at an Advantage

question 19

Multiple Choice

Why might a large firm actually be at an advantage over a smaller firm with respect to labor?

• A)Large generally pay a compensating differential to attract workers
• B)Worker turnover is generally lower
• C)Large firms enjoy better scale economies when negotiating with health insurance companies for health benefits
• D)Large firms are generally less attractive to qualified,upward mobile workers
• E)Large firms often have to draw workers from a greater distance to fill their ranks

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Definitions:

Machinery

A category of physical hardware used in the production process, including tools, engines, and devices that perform various tasks.

Sweaters

Knitted garments intended to cover the torso and arms, providing warmth and fashioned from materials like wool, cotton, or synthetic fibers.

Comparative Advantage

The ability of a country, company, or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient trade and production.

Opportunity Cost

The value of the next best alternative forgone as the result of making a decision.