Question

Consider again the law that would require employers to provide the same package of nonwage benefits offered to full-time employees to part-time employees on a prorated basis. (For employees working 25 percent of the normal workweek, employers would pay for 25 percent of the benefit package offered to full-time employees, and so on.) Also, assume most part-time workers do not currently receive benefits. Holding output and capital constant, how would firms adjust the employment/hours mix of parttime workers?

Answer 1

The increase labor cost that differs with the hours worked, there is no effect on the quasi cost.

Explanation:s

Solution

In this example stated, the benefits will be given to the part time workers, but in the proportion or respect to the number pf hours worked or input

Labor cost per hour will increase.

Furthermore, this cost is not is not on the basis of employment, but rather on the basis of hours worked, so the quasi fixed cost is not affected on the long run.