Which of the following addresses agency costs
a. advertising for employee positions in as many outlets as possible
b. hiring only from job fairs
c. spot checks of the quality of employee work
d. reducing the number of holidays
c
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A good salesperson can sell $100,000 worth of goods, while a poor one can sell only $10,000 worth of goods. Job applicants know if they are good or bad, but the firm does not
A firm will offer job applicants a choice between a fixed salary of $2,000 or a commission on the sale. Assume risk-neutral salespersons and no opportunistic behavior. Given that the firm wants to distinguish a prospective good salesperson from a poor one, what should be the commission on sales? A) Commission should be larger than 50%. B) Commission should be larger than 40%. C) Commission should be between 2% and 20%. D) Commission should be smaller than 2%.
Two alternative measures of the overall level of prices are
a. the inflation rate and the consumer price index. b. the inflation rate and the GDP deflator. c. the GDP deflator and the consumer price index. d. the cost of living index and nominal GDP.