Peter Was Recently Hired as a Salesman for a National

question 441

Multiple Choice

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

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Definitions:

EDD

Earliest Due Date, a rule in scheduling that prioritizes tasks to be completed or orders to be delivered by the closest due date.

SPT

Shortest Processing Time, a scheduling rule that prioritizes tasks based on their processing times, aiming to minimize completion time or lateness.

LPT

Least Processing Time, a scheduling rule prioritizing jobs with the shortest processing time.

Due Date

The specified date by which a task, project, or payment should be completed or submitted.