El Eram Inc

question 106

Multiple Choice

El Eram Inc.is automating processes so the company can meet its demand with a smaller workforce.The CEO asks Monica,the vice president of human resources,for advice on how to address the resulting labor surplus.Monica studies the workforce and observes that many employees are in their 50s and 60s.Furthermore,these employees are the highest-paid workers in every job category.Based on this information,what should Monica suggest as the most effective way of addressing El Eram's labor surplus?

• A) The workforce should be downsized,with layoffs focusing on the older employees.
• B) Retrain the older employees in order to make them to work more productively.
• C) Provide performance-based pay to increase production output by the employees.
• D) Replace the employees with contract workers.
• E) Offer early-retirement incentives to the employees in their 50s and 60s.

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Definitions:

Utility Function

A mathematical representation that ranks preferences or satisfaction levels consumers derive from different bundles of goods.

Perfect Substitutes

Products or goods that can replace each other perfectly with no loss of utility to the consumer.

Utility Function

A mathematical representation of a consumer's preference ranking over a set of goods or services, indicating satisfaction levels.

Units Of X

A generic term for measuring quantities of a variable or unspecified item, labeled as 'X'.