Incentive compensation schemes are more likely to be value enhancing if:
A. they can accurately account for the dysfunctional behavior of the principal.
B. they can minimize the administrative cost borne by the agent.
C. they are designed to limit the agent's gaming behavior.
D. they are designed to minimize the principal's average cost.
Answer: C
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Gross domestic product (measured in real dollars) is an important social tool because it provides
a. observers with a reasonably good index of social progress. b. policy makers with a measure of the nation's total wealth. c. policy makers with information about the economy's current rate of output and the direction of recent changes. d. economists with a reasonably good measure of income inequality.
Evidence suggests that, in the real world, people appear to care about fairness
a. only when it coincides with their own self-interest. b. only when it coincides with their determination to be consistent over time. c. even when it does not coincide with their own self-interest. d. not at all.
The following table provides information about production at the XYZ-TV Company.Number of WorkersTVs ProducedMarginal ProductValue of Marginal Product00------13535$35,00026833$33,00039931$31,000412829$29,000515527$27,000How many workers will XYZ-TV Company hire if the going wage for TV production workers is $28,000?
A. 1 B. 2 C. 3 D. 4
What is productivity?
What will be an ideal response?