Question

Employees at the Jackson Hole Corporation typically take​ forty-five minutes for lunch when the allocated time is only thirty minutes. Employees are encouraged to eat at the company cafeteria located in the middle of the company facilities. Most employees choose to eat their lunch in the cafeteria. Is there an agency cost​ here? If​ so, how can management eliminate or reduce this agency​ cost?

Answer 1

The agency cost here is the extra fifteen minutes the employees take for lunch. Reaffirming the lunch break time could be a solution, if the cafeteria has enough resources to handle it. But if the agency needs to hire more staff to work at the cafeteria so the serving procedure is faster, this would become an agency cost, maybe even larger than the inicial extra fifteen minutes cost. The corporation could also extend the workday by fifteen minutes, and make the lunch break 45 minutes long. But this could also become a larger agency cost, to negotiate a new work day schedule.

Answer 2

D

increased prosperity and a growing middle class.