Tournaments Can Tie Rewards More Closely to Actionsthat an Agent

question 208

Multiple Choice

Tournaments can tie rewards more closely to actionsthat an agent controls thereby:

• A)increasing effort and risk.
• B)reducing shirk and slack.
• C)improving productivity and pay.(True Answer )Correct
• D)All of the answers are correct.

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short period.

Space Rental

The act of obtaining the use of a physical location or property for a specified period of time in exchange for payment.

Raw Material Cost

The expenditure incurred for the raw ingredients or basic materials that are converted through manufacturing processes into goods or services.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.