Purchase Solution

Consumer theory and benefit packages

Not what you're looking for?

Ask Custom Question

Increasingly, employees are being allowed to choose benefit packages from a menu of items. For instance, workers may be given a package of benefits that includes basic and optional items. Basics might include modest medical coverage, life insurance equal to a year's salary, vacation time based on length of service, and some retirement pay. But then employees can use credits to choose among such additional benefits as full medical coverage, dental and eye care, more vacation time, additional disability income, and higher company payments to the retirement fund.

Using the theory of consumer behavior, how do you think flexible benefit packages would affect an employee's preference between higher wages and more benefits?

Purchase this Solution
Solution Summary

Benefit packages and maximization of utility by employees.

Solution Preview

Consumer theory describes how consumers seek to maximize their utility in selecting a variety of different goods. Consumers value different goods at different levels, and so by offering employees a variety of ways to be compensated, employers can retain and attract more employees. Most employees will in general value certain benefits more ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

View More Free Quizzes
Related BrainMass Solutions

  • Increasingly, employees are being allowed to choose benefit

    Using the theory of consumer behavior, how do you think flexible benefit packages would affect an employee's preference between higher wages and more benefits?

  • Costs continue to rise in Corporate America. In many cases,

    The main way that costs can be controlled is to allow employees to design their benefits packages. By doing so, costs will be kept lower as opposed to if all employees receive the same blanket benefit package.

  • Benefits Packages

    120180 Benefits Packages How do the needs of today's workforce affect the types of benefit packages that organizations offer to their employees?

  • I remember in the 1990's my company at the time paid two thi

    How should management draw this line and still attain the greatest result from their investment? Management needs to balance salary and total benefits packages.

  • Management Science

    In addition to uneconomical talk and text plans AT&T provides, the organization offers inflexible data packages that most consumers are unable to comprehend the benefit unless they are tech savvy, for example their data package incremental value range

  • This post addresses full-time and part-time implications.

    Employees who receive more benefits in their benefit packages generally tend to be more involved, and work harder on average than those who have either lost their benefits, or who are offered no benefit packages.

  • Describing a Motivational Problem

    For this Company's compensation packages must be regularly benchmarked against packages offered by other premier companies that do business in the same geography.

  • Competitive Edge/Advantage In Retailers And Service Organizations

    Many car dealers compete with automotive service and repair businesses by offering "maintenance for life" packages that cover scheduled oil changes and tire rotations.

  • Deciding force for price

    The rational consumer tends to balance that benefit against the cost, and buy accordingly. In any market scenario both sellers try to maximize their profits and buyers tend to maximize their benefit.

View More Related Solutions