What Prevents a Firm from Offering a Delayed-Compensation Scheme to Its

question 2

Multiple Choice

What prevents a firm from offering a delayed-compensation scheme to its employees and then firing each worker when the worker's value of marginal product equals his or her wage?

• A)Firms that offer delayed-compensation schemes are legally barred from firing workers.
• B)Profits would increase by allowing the worker to continue work at a lower wage.
• C)The worker will have already retired by the time the worker's value of marginal product equals his or her wage.
• D)The firm would lose the trust of the workers, and new workers would not accept the payment scheme.
• E)Profits are insensitive to when the worker quits his job.

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