Exhibit 2-5 -Jose Has One Evening in Which to Prepare for Two

question 85

Multiple Choice

Exhibit 2-5
-Jose has one evening in which to prepare for two exams and can employ one of two possible strategies:
Strategy
Score in Economics
Score in Statistics
A
94
79
B
77
90
The opportunity cost of receiving a 94 on the economics exam is __________ points on the statistics exam.

• A)79
• B)17
• C)11
• D)90

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Definitions:

Gainsharing Award

A type of incentive program where employees receive financial bonuses based on improvements in the company's performance, which they contributed to.

Scanlon Plan

A gain-sharing program designed to motivate employees to increase productivity through a shared benefits system where cost savings are passed on to employees.

Long-Term Incentives

Compensation plans designed to reward employees over a longer period, often tied to the company's performance, to foster commitment and align employees' interests with those of the company.

Lump-Sum Bonuses

One-time payments given to employees as a reward for exceptional performance, separate from their regular salary.