Susan has just been hired as a professional SCUBA diver at a resort in Bali. She is a certified divemaster and is currently being paid $3,800 a month. Susan is considering pursuing her SCUBA instructor certification, which is offered as training at her resort. Her resort needs new instructors and has promised to pay her $5,000 per month after she becomes a certified instructor. She asks around to her friends at other resorts in Indonesia, and they tell her their resorts are willing to hire her for $3,800 per month now or for $4,800 per month after her training if she wants to make the move to a new employer. Susan expects the certification to take two months of dedicated training in which she will not be productive at all and will receive no pay. Assume all firms pay exactly equal to productivity. Explain who is paying for the training under this scenario. How do you know?What percent of the training appears to be general versus firm specific?Is the holdup problem a concern in this situation? If not, explain why not. If so, explain why and specify how you would resolve it.Why is her current resort willing to pay her more as an instructor than other resorts after receiving her training? Provide a specific plausible explanation in this context.

Productivity training is tied in with gaining more headway, significantly quicker. To accomplish…

Answered: Susan has just been hired as a…

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Author:WINSTON, Wayne L.

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Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

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Susan has just been hired as a professional SCUBA diver at a resort in Bali. She is a certified divemaster and is currently being paid $3,800 a month. Susan is considering pursuing her SCUBA instructor certification, which is offered as training at her resort. Her resort needs new instructors and has promised to pay her $5,000 per month after she becomes a certified instructor. She asks around to her friends at other resorts in Indonesia, and they tell her their resorts are willing to hire her for $3,800 per month now or for $4,800 per month after her training if she wants to make the move to a new employer. Susan expects the certification to take two months of dedicated training in which she will not be productive at all and will receive no pay. Assume all firms pay exactly equal to productivity.

Explain who is paying for the training under this scenario. How do you know?
What percent of the training appears to be general versus firm specific?
Is the holdup problem a concern in this situation? If not, explain why not. If so, explain why and specify how you would resolve it.
Why is her current resort willing to pay her more as an instructor than other resorts after receiving her training? Provide a specific plausible explanation in this context.

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