Pat Has Just Graduated from College and Has Two Job

question 107

Multiple Choice

Pat has just graduated from college and has two job offers.One pays $45,000 and requires that Pat supervise employees doing construction work on a busy highway.The other is an office job that pays $40,000.Chris has received the same offers from the same firms.Pat values the added safety of the office job at $6,000 per year and Chris values the added safety of the office job at $3,000 per year.
Suppose that the agency that regulates highway safety requires that the freeway construction firm provide additional safety precautions.After the changes,Chris places no additional value on working at the office,and Pat values the added safety of the office job by $2,000 per year.If the safety precautions cost the firm $3,000 per year and the freeway construction firm reduces salaries by $3,000 to $42,000

• A)Pat will certainly take the office job and Chris will be indifferent.
• B)both will certainly take the freeway job.
• C)both will certainly take the office job.
• D)Chris will certainly take the freeway job and Pat will be indifferent.

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Definitions:

SUTA

State Unemployment Tax Act, which mandates employers to pay state unemployment taxes.

Temporary

Pertaining to an employee, position, or status that is intended for a limited time period, often with an end date in mind.

Permanent

Describes assets or records that are intended to be held or used on a long-term basis and not expected to be sold or otherwise converted into cash within a year.