Suppose a worker earns $14 per hour plus health benefits worth $2 per hour. If the employer...

Question:

Suppose a worker earns $14 per hour plus health benefits worth $2 per hour. If the employer withdraws the benefits and offers the worker $17 per hour the worker will be:

A. better off because $17 is more than the $16 he or she was earning in wages plus benefits

B. as well off because he or she is earning more than before

C. worse off because previously he or she was not getting the benefits

D. worse off because previously he or she was getting the benefits

Fringe Benefits:

In addition to paying their employees wages or salaries, many companies offer Fringe Benefits in order to maximize employee retention rates. Fringe Benefits are non-monetary benefits that are derived due to one's employment (e.g. a group insurance policy).

Answer and Explanation: 1

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The correct answer is A. better off because $17 is more than the $16 he or she was earning in wages plus benefits.

  • This is because, technically, the...

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Labor Market: Definition & Theory

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Chapter 3 / Lesson 41
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Learn the labor market definition and what happens in the labor market. See what the split labor market theory is and learn the different types of labor market.


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