If a Firm Was Owned by Its Employees

question 5

Multiple Choice

If a firm was owned by its employees,

• A) there is a higher probability that wage reductions would outweigh layoffs.
• B) those in charge would not act any differently than regular owners; there would still be layoffs.
• C) those not in charge would remain risk neutral.
• D) wage reductions would be lower than if the firm was run for profit.

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Definitions:

Employer's Cost

The total expenses incurred by employers to compensate employees, including wages, benefits, taxes, and insurance.

Picket Line Misconduct

Unacceptable or illegal actions committed by individuals participating in a picket line, typically during a labor strike.

Criminal Prosecution

The process by which a person is formally charged with a crime by a governmental body and brought to trial.

Waiver of Due Process

The voluntary surrender of an individual’s legal rights to procedural protections in a legal or disciplinary process.