Ed Was Recently Hired as a Salesman for a National

question 164

Multiple Choice

Ed 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) Ed 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) Ed should quit this job and take a job where he gets paid an equilibrium wage more frequently.

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Definitions:

Elderly

Persons of advanced age, often defined as being 65 years or older, who may experience unique health, social, and economic challenges.

Geronticide

The act or practice of killing the elderly or allowing them to die by withholding necessary care.

Genocide

The deliberate and systematic extermination of a national, racial, political, or cultural group.

Homicide

Operationally defined as the intentional and sometimes unintentional or accidental killing of another person.