Suppose That All Workers Value a 1% Reduction in the Workplace

question 114

Multiple Choice

Suppose that all workers value a 1% reduction in the workplace injury rate at $1,000.The cost of reducing the injury rate by 1% is $200 per worker.Firms currently pay $20,000 per year to workers,without any effort to improve safety.
Suppose new firms began to offer workers $19,500 and a 1% reduction in the injury rate.The total benefit to workers of the existing firms' offer is __________ and the benefit of the new firms' offer is __________.

• A)$20,000;$19,500
• B)$20,000;$20,500
• C)$19,800;$19,700
• D)$20,000;$20,000

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Definitions:

Acquisition Method

An accounting method used to assess and combine the financial statements of two companies in the event of a merger or acquisition.

Fair Market Values

The price at which an asset would trade in a competitive auction setting, representing the asset's value between willing buyers and sellers.

Net Assets

Net Assets represent the residual interest in the assets of an entity after deducting its liabilities, essentially equivalent to equity in a for-profit organization.

Net Income

The total earnings or profit of a company after subtracting all expenses, including taxes, interest, and costs, representing the bottom line on an income statement.