Charley's employer is considering him for a general training program that will cost $3 per hour.His current marginal revenue product is $15 per hour and will rise to $20 upon completion of the program.Of the following,Charley's training and post-training wage,respectively,will most likely be:

Question

Quizplus · Accepted Answer

Charley's current marginal revenue product is $15 per hour, but it will increase to $20 after completion of the training program. Thus, it makes sense for the employer to invest $3 per hour for the training, as Charley's increased productivity will more than make up for the cost. Therefore, the training and post-training wage will most likely be $12 and $20, respectively (as the training cost will be subtracted from the post-training wage). Thus, the correct answer is D.

Charley's Employer Is Considering Him for a General Training Program