Refer to the scenario above. What is the net present value of buying the warranty?

Suppose the probability of an employee being caught shirking, q, is a function of the employer's monitoring, M, such that q = M/100

If workers must put up a $1,000 bond and the gain to each worker from shirking is $100, what is the employer's optimal level of monitoring that is just sufficient to discourage shirking?

Which of the following is the best example of a variable cost?

a. property taxes b. lease payments for equipment rental c. rent on office space d. wages for hourly workers e. interest on outstanding loans