Table 5.1 Two-Period Training Model

-A profit-maximizing firm which wants to provide firm-specific training to its workers will pay ________ in the training period and ________ after training is completed. (See Table 5.1 for definitions of abbreviations.)

Question

Table 5.1 Two-Period Training Model
 
-A profit-maximizing firm which wants to provide firm-specific training to its workers will pay ________ in the training period and ________ after training is completed. (See Table 5.1 for definitions of abbreviations.)

Quizplus · Accepted Answer

A profit-maximizing firm will pay less than the market wage (W*) during the training period and less than the marginal product of labor (MP1) after training to recoup the training costs.