One argument against using a profit-sharing scheme is the potential for free-riding. In this situation, free-riding refers to
A. one firm using the same contract specifications as another firm.
B. a worker not providing effort because his contribution to profit is very small.
C. profits being insensitive to worker effort because all increases in profit are returned to the workers due to the profit-sharing scheme.
D. the firm not honestly reporting its profits.
E. a worker not providing effort because he does not want his coworkers' wages to increase.
Answer: B
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The above table shows the short-run total product schedule for the campus book store. With which employee do diminishing marginal returns set in?
A) the 9th employee B) the 6th employee C) the 5th employee D) the 2nd employee
All else constant, a decrease in the per unit price of labor would create an incentive for a firm manager to substitute labor for capital in the firm's production process
Indicate whether the statement is true or false