Scenario 17.1
Consider the information below:
For Group A the cost of attaining an educational level y is
C A (y) = $6,000y
and for Group B the cost of attaining that level is
C B (y) = $10,000y.
Employees will be offered $50,000 if they have where y* is an education threshold determined by the employer. They will be offered $130,000 if they have
-Refer to Scenario 17.1. The highest level of y* that can be set and still have the high-productivity people choose to meet it is:
A) 16.
B) 13 1/3.
C) 13.
D) 8.
E) 0.

Question

Scenario 17.1
Consider the information below:
For Group A the cost of attaining an educational level y is
C A (y) = $6,000y
and for Group B the cost of attaining that level is
C B (y) = $10,000y.
Employees will be offered $50,000 if they have  where y* is an education threshold determined by the employer. They will be offered $130,000 if they have 
-Refer to Scenario 17.1. The highest level of y* that can be set and still have the high-productivity people choose to meet it is:
A) 16. 
B) 13 1/3. 
C) 13. 
D) 8. 
E) 0.

Quizplus · Accepted Answer

The highest level of y* that can be set while still having high-productivity people choose to meet it is determined by the productivity level that balances the cost and benefit for high-productivity individuals.

Scenario 17.1 Consider the Information Below