Quick%20Quiz%2014%21 - productivity must have risen. 2....

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© Hadi Salehi Esfahani Quick Quiz 14! In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. 1. What impact the wage increase must have had on turnover, absenteeism, and productivity at Ford Motor Co. at the time? 2. Could Ford's profits have gone up as a result of the high wage? Later on, many other companies followed Ford's example. 3. What impact this general wage increase may have had on turnover, absenteeism, and productivity at Ford? 4. What impact this general wage increase may have had on the overall unemployment rate?
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© Hadi Salehi Esfahani Solution to Quick Quiz 14: 1. What impact the wage policy must have had on turnover, absenteeism, and productivity at Ford Motor Co. at the time? Turnover and absenteeism must have fallen and
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Unformatted text preview: productivity must have risen. 2. Could Ford's profits have gone up as a result of the high wage? Yes. Although the wage increase raised costs per worker, higher productivity could have increased revenues per worker even more. Hadi Salehi Esfahani Solution to Quick Quiz 14: 3. What impact the general wage increase may have had on turnover, absenteeism, and productivity at Ford? The general wage increase is likely to have reduced the advantages of Ford's initial wage raise, restoring the old rates of turnover and absenteeism and productivity. 4. What impact this general wage increase may have had on the overall unemployment rate? The general wage increase is likely to have reduced the demand for labor and increased unemployment....
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This note was uploaded on 01/27/2012 for the course ECON 509 taught by Professor Villamil during the Fall '08 term at University of Illinois, Urbana Champaign.

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Quick%20Quiz%2014%21 - productivity must have risen. 2....

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