Economic

Chapter 1: Applied problems, 4, 5, and 6, pages 32-33, and Mathematical Exercise #2, page 35. 4. extend why it would cost Rafael Nadal or Venus Williams ofttimes than than to pass the professional tennis tour and open a tennis shop than it would for the coach of a university tennis team to do. I would create to say that one cost of opening a tennis shop is the opportunity cost of labor or the forgone salary of other job options. Because Nadals or Williams asleep(p) income is much higher than that of a university coach, their opportunity cost is higher. 5. An article in the Wall Street Journal discusses a trend among to a greater extent or less large US Corporation to base the remuneration of outside(a) members of their boards of directors partly on the functioning of the corporation. This growing cause more virtually aligns the director to the company. (Some) companies link certain hackneyed or stock-option grants for directors to improved financial perform ance, using a bar such(prenominal) as annual return on equity. How would such a gene linkage tend to snub the delegation problems mingled with managers and shareholders as a undivided? Why would directors be more efficient than shareholders at astir(p) managerial performance and changing their incentives?

How would such a linkage tend to reduce the agency problems between managers and shareholders as a whole? Such a linkage sens reduce the agency problem because it more closely ties the directors individually efficient treat with aggregate surplus; that is, the boilers suit most efficient outcome, and optimum performance of the corporation. Thi! s means that the shareholders preferred outcome will more closely resemble that of the directors. Why would directors be more efficient than shareholders at improving managerial performance and changing their incentives? Directors would be more effective at fixture the performance of managers specifically because they have a position to more directly control the managers incentives. Shareholders can only periodically ballot on...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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