Sub part (a):
The difference in tip earnings when the server goes from mean to nice.
Sub part (a):
Answer to Problem 10TPS
$60.
Explanation of Solution
When the server is mean, he receives tip earnings of $40 per shift. When the server is nice, he is able to earn the tip of $100 per shift. Thus, when the server moves from being rude to being nice, the change in the tip earnings can be calculated as follows:
Thus, the difference between being nice and being mean is $60. Therefore, the server will earn additional $60 when he becomes nice rather than being mean.
Concept introduction:
Wages and Salaries: Wages and salaries are the main two means through which the people are paid. The wages are paid on the hourly basis for a day whereas the salaries are paid monthly.
Sub part (b):
The average tip earned when all the servers are mean.
Sub part (b):
Answer to Problem 10TPS
$40.
Explanation of Solution
When the server is mean, he receives the tip earnings of $40 per shift. When the server is nice, he is able to earn the tip of $100 per shift. Thus, when all the workers are mean, each will earn only $40 per shift. This means that the average tip earned by the server will be the same, which is $40 per shift. When all the servers are nice, each will earn $100 per shift as a tip. Therefore, when all servers are nice, each will earn $100 per shift.
Concept introduction:
Wages and Salaries: Wages and salaries are the main two means through which the people are paid. The wages are paid on the hourly basis for a day whereas the salaries are paid monthly.
Sub part (c):
The benefit from being nice from being mean.
Sub part (c):
Explanation of Solution
When the server is mean, he receives the tip earnings of $40 per shift. When the server is nice, he is able to earn the tip of $100 per shift. When some of the workers are mean and some are nice, there will be changes in the mean average and nice average. This can be calculated as follows:
|
Mean (Omitting the individual) |
Nice (Omitting the individual) | Total tips if the individual is mean | Total tips if the individual is Nice | Mean average | Nice average | Benefit of the individual from being nice |
| 0 | 9 |
|
|
|
|
|
| 5 | 4 |
|
|
|
|
|
| 9 | 0 |
|
|
|
|
|
From the above table, it can be identified that the benefit of an individual from being nice rather than being mean is $6. Thus, in pool system, the benefit for the server is only 1/10th of the benefit under normal system at any combination.
Concept introduction:
Wages and Salaries: Wages and salaries are the main two means through which the people are paid. The wages are paid on the hourly basis for a day whereas the salaries are paid monthly.
Sub part (d):
When the servers like to be more nice.
Sub part (d):
Explanation of Solution
When the server is mean, he receives the tip earnings of $40 per shift. When the server is nice, he is able to earn the tip of $100 per shift. Thus, the benefit by being nice is $60 under per shift system. When the pool system is operating, the worker will benefit only with $6.
Therefore, the worker will have more incentive to be nice under the system where they can keep their own tip. When the restaurants want to keep their customers happy, the servers should be nice. Thus, the restaurant would follow the personal tip policy rather than the pool system.
Concept introduction:
Wages and Salaries: Wages and Salaries are the main two means through which the people are paid. The wages are paid on the hourly basis for a day whereas the salaries are paid monthly.
Want to see more full solutions like this?
Chapter 7 Solutions
Modern Principles: Macroeconomics
- Apex Learning Apex Learning Courses leaming.com/public/activity/1003002/assessment QQuizlet K! Kahoot! 1.3.2 Quiz: Specialization Question 5 of 10 Which term describes a business's decision to focus on producing a small number of products? OO A. Opportunity cost B. Specialization C. Voluntary exchange D. Self-sufficiency PREVIOUS SUBMITarrow_forwardnot use ai pleasearrow_forwardBefore the Civil War, the South traded with the North and with England. The South sold cotton and bought manufactured goods and food. During the war, one of President Lincoln's first actions was a blockade of the ports in the South to prevent this trade. The South had to increase its production of munitions and food. Draw a point to show the South's production point prior to the Civil War. Label it 1. Draw a point to show the South's consumption point prior to the Civil War. Label it 2. During the war, the South's factors of production were severely depleted and its production possibilities decreased. Draw a curve that shows the effects of the Civil War on the South's PPF. Label it PPF₁. Draw a point to show the South's production point during the Civil War. Label it 3. During the war, the South did not engage in trade. Draw a point to show the South's consumption point during the Civil War. Label it 4. 100 80- 60- Other goods and services (units) ☑ 40- 20- 200 400 600 PPF 800 1000…arrow_forward
- Suppose that a paper mill "feeds" a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $10, the second by $9, the third by $8, and so on, until the tenth unit increases profit by just $1. The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $3.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and total…arrow_forwardPlanes frequently push back from the gate on time, but then wait 2 feet away from the gate until it is time to queue up for takeoff. This increases fuel consumption and increases the time that passengers must sit in a cramped plane awaiting takeoff. The following table shows the pay schedule for the flight crew. Pay Per diem Holding pay per hour Flight Attendant Captain First Officer $3 $3 $3 $20 $20 $20 Hourly wage (after push back) $38 $184 $50 Per diem pay indicates how much the flight crew earns once it checks into the airport. Holding pay indicates how much the flight crew earns after it loads the plane. Hourly wage indicates how much the flight crew earns after it pushes back from the gate and turns on the beacon. In this scenario, who does not have an incentive to push back from the gate as early as possible? Check all that apply. Captain Flight attendants Passengers First officer True or False: Allowing the airline to decide when to push back from the gate would reduce…arrow_forwardThis Wendy’s commercial confuses the notions of appreciation and consumer surplus. Recall that consumer surplus is the difference between what a consumer is willing to pay for a good and what they actually pay for it. According to standard economic theory, consumer surplus must always bearrow_forward
- In economics, the cost of producing a good: Question 6 options: is the maximum value of other goods that could have been produced using the same resources. equals the out-of-pocket costs incurred in producing the good. is the value of inputs used up in production. is the value of other goods that could have been produced using the same resources.arrow_forwardPlease correct answer and don't used hand raiting and don't used Ai solutionarrow_forwardnot use ai pleasearrow_forward
- Gates Doubles Down on Malaria Eradication The End Malaria Council, convened by Bill Gates and Ray Chambers, seeks to mobilize resources to prevent and treat malaria. The current level of financing is too low to end malaria. Bruno Moonen, deputy director for malaria at the Gates Foundation, says that more resources, more leadership, and new technologies are needed to eradicate malaria in the current generation. Is Bruno Moonen talking about production efficiency or allocative efficiency or both? Bruno Moonen is talking about _______. A. production efficiency but not allocative efficiency B. production efficiency and allocative efficiency C. allocative efficiency but not production efficiency D. neither production efficiency nor allocative efficiencyarrow_forwardWhat challenges do medical facilities face when trying to become more culturally competent? What kinds of assumptions do providers sometimes make about people from other cultures? What factors may cause providers to relate to patients in a biased manner? What can healthcare organizations do to ensure cultural competence among their employees?arrow_forwardBrazil, Russia, India, China, and South Africa, also known as BRICS, are emerging countries poised to be dominant economic players in the 21st century. What are some of the political, legal and economic conditions that help or hinder economic expansion for these countries?arrow_forward
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education