Answered: Many employers in the U.S. pay…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Many employers in the U.S. pay significant amounts towards their employees' health insurance premiums. If the benefit-cost per full-time employee rises (e.g. when the insurer raises premiums) and the employer does not want the total cost of the employees' compensation (wage + benefits) to rise, all of the following would represent valid options for the employer to consider, except

a. replacing some full-time employees with part-time workers.

b. prohibiting fulltime employees to work overtime and hire temporary part-time workers to work those extra hours instead (assuming overtime is paid at the same wage rate as regular work hours).

c. increasing full-time employee's contribution towards premiums; not changing wages.

d.laying off some of the full-time employees and instituting mandatory overtime for the remaining full-time employees (assuming overtime is paid at the same wage rate as regular work hours).

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