2-13 - Chapter 5 I. Hiring costs and Fixed costs A....

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Chapter 5 I. Hiring costs and Fixed costs A. Introduction B. On the job training C. Under what conditions will the firm pay for training i. General training ii. Specific training II. Quasi-Fixed Costs III. Implications A. Skill level and firm investments B. Info is laid off? C. Who gets on-the-job training B. On the job training: Implicit costs— 1. the time it takes for a trainer in a firm, or foregone output of the person doing the training 2. foregone output of trainee Explicit costs: tools, equipment, etc. C. Initially, we said hire when MRP ≥ Wage Suppose Tony Pays $2500 per worker for training. Then, hire when MRP≥ Wage + Training cost Or [MRP wage] – Training Cost ≥ 0 MRP is a future benefit Training cost is a current cost $12,500 $10,000 $2500 MRP # of workers General Training: Develop skills that are valued equally by the organization that does the training and other organizations Is it good business for a firm to pay for general training? You wouldn’t want to pay the training cost if you can’t maintain the gap between MRP
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2-13 - Chapter 5 I. Hiring costs and Fixed costs A....

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