An Incentive System in Which an Organization Links Pay Increases

question 27

Multiple Choice

An incentive system in which an organization links pay increases to ratings on performance appraisals is referred to as:

• A) commission.
• B) a Scanlon plan.
• C) merit pay.
• D) gain sharing.
• E) profit sharing.

Understand the similarities and differences between international trade agreements like WTO and NAFTA.

Explain the concept and implications of corporate welfare.

Understand the role and impact of economic planning in contemporary societies.

Analyze the effects of specific corporate and economic policies on society, such as subprime mortgage lending.

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Definitions:

Average Variable Cost

The cost of each unit variable, determined by dividing the overall variable costs by the produced output quantity.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's production increases.

Diminishing Returns

A principle stating that as more of a variable input is added to a fixed input, beyond some point, the additional output from the additional input will decrease.

Marginal Cost

The financial outlay required to create another unit of a good or service.