It Costs an Employer $20,000 to Train a Worker

question 24

Multiple Choice

It costs an employer $20,000 to train a worker. The worker, after training, is paid $50,000. During a recession, the worker's productivity falls, but then, one year later is expected to return to its original level such that the present value of future profits is $30,000. What is the lowest the worker's productivity during the year can fall to before the firm will consider firing the worker (assuming they continue to pay $50,000 a year) ?

• A) $20,000
• B) $30,000
• C) $40,000
• D) $0

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