Question

1. Supposed that you represent the shareholder board of Apple Inc. and decide to elicit high...

1. Supposed that you represent the shareholder board of Apple Inc. and decide to elicit high CEO effort to help the company: What will be your incentive contract plan (e.g. bonus, stock option…etc.)? Given your answer in a, if Apple does not perform as expected (say iphone X is not popular), what criticism of the incentive contract plan can you see?

2. Please apply demand and supply analysis in CH 2 to answer the following questions related to the U.S. real estate market: What will be the impact on residential real estate market if the Fed raises the interest rate again in this year? Please state the leftward/rightward shift on either demand/supply curve and comment on the equilibrium price change. If a price ceiling on real estate agency commission is limited at 1% only, what will be the impact on new market equilibrium price and quantity of residential real estate market? ? Please state the leftward/rightward shift on either demand/supply curve and comment on the equilibrium price change.

Homework Answers

Answer #1

My incentive plan is to give bonus on the basis of average of profit and sales. The criticism is that it does not focus on innovation in production, products, marketing etc

Due to interest rate rise demand will shift downwards from D to Do in fig 1.price will fall from p to po and quantity traded falls from q to qo

As commission is limited demand shifts rightwards from D to D1 in fig 2.price rises from p to p1 and quantity rises from q to q1

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