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Selected Answer: Required compensation Widgets Sold Disutility of effort (total, not marginal) 0 $0 1 $40 2 $222 3 $495 4 $860 5 $1'250 6

Selected Answer:
Required compensation
Widgets Sold Disutility of effort (total, not marginal)
0 $0
1 $40
2 $222
3 $495
4 $860
5 $1'250
6 $1'750
7 $2'388
8 $3'117
9 $3'937
10 $4'849

Suppose that p (the price of the widget on the market) rises to $7,200.

The optimal incentive intensity is_______ in the case in which p=$7,000

Answers:
  • higher than
  • lower than
  • the same as
My incorrect answer was "lower than

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