Matt Is Offered a Job Driving the Campus Shuttle Bus

question 137

Multiple Choice

Matt is offered a job driving the campus shuttle bus from 4 P.M.to 6 P.M.each Monday.His reservation wage for this job is $7/hour.
Now suppose the director offers Matt $50/hour,but also announces that the earnings from the job will be divided equally among Matt and four other students.Will Matt still accept this job?

• A)No,because the other students are free riders.
• B)No,because it is not fair for Matt to do the work and then have to share the wage.
• C)Yes,because $50 divided by five is greater than Matt's reservation wage.
• D)Yes,because Matt believes in the Rawlsian theory of justice.

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Definitions:

Short-Term Debt

Financial obligations that are due to be paid within one year or less.

Cash Flow

The net amount of cash being transferred into and out of a business, critical for assessing its liquidity, operational efficiency, and financial health.

Creditors

Individuals or institutions to whom money is owed by a debtor.

Interest Expense

The price paid by an entity for the use of borrowed funds throughout a specific time frame.