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A firm's manager is switched from a fixed salary to an incentive compensation package that pays a larger bonus when the firm's profits are higher.
A firm's manager is switched from a fixed salary to an incentive compensation package that pays a larger bonus when the firm's profits are higher. What can be said about the manager's response to this new compensation package? Group of answer choices The manager's effort will be based on his or her personal preferences for labor (income) and leisure. The manager will likely quit. The manager will minimize leisure. The manager will maximize effort and minimize leisure. The manager will maximize effort
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