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Afford to pay the worker in the second period

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Reference no: EM132338341

Question

Suppose that a firm is considering hiring a worker and providing the worker with general training. The workers MPL is $100 during the training period, but rises to $200 in the post- training period. The workers wage is $100 during the training period, the cost of training is $50 and the discount rate is 10 percent. What is the most that a profit-maximizing firm can afford to pay the worker in the second period?

Reference no: EM132338341

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