According to One of the Top Management Consultants of the Past

question 284

Multiple Choice

According to one of the top management consultants of the past 40 years,the late Peter Drucker:

• A)top executives are entitled to any level of pay they can negotiate with their board of directors.
• B)the annual pay for top executives should include a small guaranteed salary and should include a very large bonus in years where the firm earns higher profits than competitors.
• C)all bonuses paid to CEOs should be tied to long-run increases in market share.
• D)CEOs should not earn much more than 20 times the earnings of the company's lowest-paid employee.

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Definitions:

Production Function

A mathematical framework defining the association between the resources used in production and the output generated.

Factor Prices

The prices paid for the use of factors of production, such as labor, capital, and land, in the production process.

Output Cost

The total expenses incurred in the process of producing goods or services, including both fixed and variable costs.

Long-Run Total Cost

The aggregate cost of production when all factors of production, including capital and labor, are variable in the long term.