Consider a firm that produces military equipment. It employs 2,000 workers and p

Question

Consider a firm that produces military equipment. It employs 2,000 workers and pays each of them a competitive wage of $40,000 per year; its total labor costs are therefore $80 million per year. The firm also has other, non-labor costs of $30 million per year. Last year, the CEO of the company paid a lobbyist $1 million to help arrange a meeting with key members of Congress. That meeting led to a deal in which the firm sold $150 million worth of equipment to the U.S. military. The board of the company was so pleased with the CEO that it gave him bonus pay. All told, the CEO earned $10 million that year--250 times what the average line worker earned. The remaining $29 million of earnings was distributed to shareholders. Which of the people in this story added value to the military equipment produced by this firm? I. The workers II. The lobbyist III. The CEO IV. The U.S. Military V. The shareholders A. I only B. I, II, III, IV, and V C. I and III only

Explanation / Answer

C. I and III only is answer thank you

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