Which incentive scheme would simultaneously elicit accurate ...

[tuffie]

Which incentive scheme would simultaneously elicit accurate information about feasible plant production levels and motivate managers to perform up to potential (in the following schemes, B is the bonus payment, Q is actual plant output, and Qf is the
 
  manager's estimate of feasible output)? A) B = 0.4Q
  B) B = 0.4(Q - Qf)
  C) B = 0.4Qf + 0.3(Q - Qf) if Q > Qf
  D) B = 0.4Qf - 0.6(Q - Qf) if Q < Qf
  E) B = 0.4Qf - 0.6(Q - Qf) if Q > Qf

Question 2

Refer to Scenario 8.2. The more elastic is demand for yachts,
 
  A) the more Q will fall and the more P will rise.
  B) the less Q will fall and the more P will rise.
  C) the more Q will fall and the less P will rise.
  D) the less Q will fall and the less P will rise.
  E) the closer is the new equilibrium point to the old.

[meryzewe]

Answer to Question 1

C

Answer to Question 2

C

[tuffie]

Thank you

[meryzewe]

No problemo