Under a tournament pay scheme, the pay gap between a few "winners" (those who receive big promotions) and other employees exceeds the productivity differences between these two groups. The reason firms might use such a scheme is that they
a. gain tax advantages by paying a few workers large salaries and using fringe benefits to compensate the rest of the employees.
b. hope to raise the productivity of those who receive big promotions because marginal productivity adjusts to equal wages.
c. overestimate the productivity of those who receive big promotions and inadvertently pay them "too much."
d. hope to raise the productivity of all other workers, who will work harder trying to gain a big promotion
d. hope to raise the productivity of all other workers, who will work harder trying to gain a big promotion
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When quantities of two goods belong to the same indifference curve, which of the following is true?
a. The combinations of the two goods along the indifference curve yield the same total utility. b. Prices of the two goods are equal. c. Marginal utilities of both goods are equal. d. The total utility of all combinations above the curve equal zero.
If the average price level in 1991 was 1.20 relative to the base year in 1986, then a dollar in 1991 bought 20 percent more goods and services than a dollar in 1986
a. True b. False Indicate whether the statement is true or false
The price of silver increases from $10 per ounce to $15 per ounce while the price of gold increases from $300 per ounce to $310. In this situation, the price of silver relative to the price of gold has
a. fallen. b. risen. c. remained the same. d. cannot be determined given the information provided.
What are some differences between a command economy and a market economy?
What will be an ideal response?