A manager derives satisfaction from income and leisure on the job (shirking).
a.If the manager is paid a fixed salary of $100,000,how much leisure will she consume on the job during an eight-hour day?

b.When the manager is given a salary of $100,000 plus 10 percent of the firm's profits,she chooses to spend six hours managing and two hours consuming leisure.Salary and bonus total $120,000.Does the manager necessarily prefer this situation to the situation in part (a)?

Question

A manager derives satisfaction from income and leisure on the job (shirking).
a.If the manager is paid a fixed salary of $100,000,how much leisure will she consume on the job during an eight-hour day?
 
b.When the manager is given a salary of $100,000 plus 10 percent of the firm's profits,she chooses to spend six hours managing and two hours consuming leisure.Salary and bonus total $120,000.Does the manager necessarily prefer this situation to the situation in part (a)?

Quizplus · Accepted Answer

The Answer of A manager derives satisfaction from income and leisure on the job (shirking).
a.If the manager is paid a fixed salary of $100,000,how much leisure will she consume on the job during an eight-hour day?
 
b.When the manager is given a salary of $100,000 plus 10 percent of the firm's profits,she chooses to spend six hours managing and two hours consuming leisure.Salary and bonus total $120,000.Does the manager necessarily prefer this situation to the situation in part (a)?

A Manager Derives Satisfaction from Income and Leisure on the Job