Suppose That All Workers Value a Safe Job $2,000 Per

question 15

Multiple Choice

Suppose that all workers value a safe job $2,000 per year more than a risky job. The cost to firms of providing a safe job is $700 per year for each worker. Firms currently pay workers $35,000 per year, without any effort to improve safety. If new firms began to offer workers $34,000 per year and safe jobs, then the total cost of hiring a worker would be ______ at the new firms and ______ at the existing firms.

• A)$33,700; $35,700
• B)$34,700; $35,000
• C)$35,000; $34,700
• D)$35,700; $33,700

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Definitions:

Cash Deficiency

A situation where the cash available is not sufficient to cover the expenses or liabilities; often results in the need for additional financing or budget adjustments.

Production Budget

A plan that outlines the number of units that must be produced within a period to meet the expected sales and inventory levels.

Units Produced

Units produced quantify the number of complete units manufactured or produced during a specific time frame in a production process.

Budget

An accounting device used to plan and control resources of operational departments and divisions.