Which of the Following Is Most Likely to Motivate Executives

question 79

Multiple Choice

Which of the following is most likely to motivate executives to maximise shareholder wealth?

• A)Tying bonuses to cost reductions and meeting budget goals
• B)Offering them relatively high salaries
• C)Tying annual bonuses to increases in annual profits
• D)Compensating them with stock options that can only be exercised after five years

Understand the impact of externalities on market efficiency and socially optimal levels of production and consumption.

Identify the concepts of marginal private cost, marginal external cost, and marginal social cost.

Analyze the effects of pollution on long-run industry dynamics and market inefficiencies.

Recognize negative externalities in various contexts and their implications for social welfare.

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Definitions:

Democratic Party

One of the two major political parties in the United States, traditionally associated with liberal and progressive policies.

African American Vote

The electoral participation and voting rights of African Americans, a critical aspect of U.S. civil rights progress.

Allied Debts

The financial obligations incurred by countries allied during wartime, particularly during World War I, owed to other nations and financial institutions.

American Response

The actions or reactions of the United States government, its people, or organizations to domestic or international events, crises, or policies.