Author Question: Suppose the plant owners design an incentive scheme for the plant manager in which the feasible ... (Read 645 times)

wrbasek0

  • Hero Member
  • *****
  • Posts: 560
Suppose the plant owners design an incentive scheme for the plant manager in which the feasible production level is set equal to output from the previous quarter. The bonus payment is determined by the formula B = 0.2Qf + 0.2(Q - Qf).
 
  What potential problems can arise with this scheme? A) If Qf is unusually large, then the manager has little incentive to work hard during the following quarter because Q will likely fall back below Qf.
  B) If Qf is unusually small, then the manager will receive a small bonus regardless of their efforts during the current quarter.
  C) The manager has an incentive to underperform and generate a small Q during the current quarter in order to provide a smaller benchmark for performance in the next quarter.
  D) The incentive scheme only depends on current output and does not measure performance relative to feasible production.

Question 2

Refer to Scenario 13.16. If the firms must choose their prices simultaneously,
 
  A) both firms will buy gelato.
  B) both firms will buy yogurt.
  C) two pure strategy equilibria exist, one in which Gooi alone buys a gelato machine and one in which Ici alone buys a gelato machine.
  D) the game has no pure strategy equilibrium.
  E) the game has no mixed strategy equilibrium.



k.lashomb

  • Sr. Member
  • ****
  • Posts: 346
Answer to Question 1

D

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Opium has influenced much of the world's most popular literature. The following authors were all opium users, of varying degrees: Lewis Carroll, Charles, Dickens, Arthur Conan Doyle, and Oscar Wilde.

Did you know?

Fungal nail infections account for up to 30% of all skin infections. They affect 5% of the general population—mostly people over the age of 70.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

For a complete list of videos, visit our video library