Suppose You Are a Risk-Neutral Manager Attempting to Hire a New

question 38

Multiple Choice

Suppose you are a risk-neutral manager attempting to hire a new sales manager.All of the workers in the market have the same ability to manage and sell,but they differ with respect to the wage at which they are willing to work for your company.The market for sales managers is composed of three types of individuals: 85 percent are willing to work for $75,000 and 15 percent are willing to work for $85,000.The first interviewee is only willing to work for $85,000.If the human resource director spends five hours interviewing each candidate and the opportunity cost of this director's time is $500,then the director should:

• A) search again since the expected benefit of an additional search exceeds the cost.
• B) stop searching since the expected benefit of an additional search is less than the cost.
• C) search again since the expected benefit of an additional search is less than the cost.
• D) stop searching since the expected benefit of an additional search exceeds the cost.

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Definitions:

Colonies of Japan

Territories that were under Japanese imperial control from the late 19th century through the mid-20th century, including Korea, Taiwan, and parts of China.

Transportation Networks

Systems consisting of roads, railways, air routes, and waterways that facilitate the movement of goods and people across various locations.

Second World War

A global war that lasted from 1939 to 1945, involving most of the world's nations and marked by significant events such as the Holocaust and the use of atomic bombs on Japan.

Conflict-ridden

Describes a situation, relationship, or environment characterized by ongoing disputes, disagreements, or tensions.