Assume That a Worker Works 60 Hours a Week

question 11

Multiple Choice

Assume that a worker works 60 hours a week. He contributes an additional $90,000 to the firm's revenue and his personal disutility from the job is $35,000. If he is paid $58,000 per year, what is the net profit from this employment relationship?

• A) $32,000
• B) $35,000
• C) $55,000
• D) $34,000
• E) $23,000

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Definitions:

Dividend Payment

A portion of a company's profits distributed to shareholders, typically on a quarterly basis.

Flotation Costs

The financial outlay a firm encounters when releasing new securities, involving charges for legal matters, underwriting, and registering the issuance.

Issuance

The act of making something available or distributing it officially, commonly used in the context of financial securities being issued to the public.

New Securities

Financial instruments recently issued by a corporation or government entity to raise funds from investors.