EDIT:not sure why the box popped up around one of the answers? Ignore that box t

Question

EDIT:not sure why the box popped up around one of the answers? Ignore that box then.

Suppose that you work in a competitive labor market and your total compensation is equal to your value added. Last year, you earned $70,000 in wages and $30,000 in benefits. If your labor productivity increases 3% and the cost of your benefits increase by 10%, what is the value of your new compensation package?
A) $103,000 (wages: $70,000, benefits: $33,000)
B) $102,100 (wages: $70,000, benefits: $32,100)
C) $107,000 (wages: $74,000, benefits: $33,000)

EDIT:not sure why the box popped up around one of the answers? Ignore that box then.

Suppose that you work in a competitive labor market and your total compensation is equal to your value added. Last year, you earned $70,000 in wages and $30,000 in benefits. If your labor productivity increases 3% and the cost of your benefits increase by 10%, what is the value of your new compensation package?
A) $103,000 (wages: $70,000, benefits: $33,000)
B) $102,100 (wages: $70,000, benefits: $32,100)
C) $107,000 (wages: $74,000, benefits: $33,000)

Explanation / Answer

Ans:

A) $103,000 (wages: $70,000, benefits: $33,000)

total compensation = labor productivity

So, total compensation = 100,000 *(100,000*0.03) = 103,000

The difference = 3,00, it is the 10% of benefits.

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