Refer to Scenario 17.5. Under which of the following payment schemes w

Refer to Scenario 17.5. Under which of the following payment schemes would workers have an incentive to exert high effort?

A) A guaranteed wage equal to $0
B) A guaranteed wage equal to $5000
C) A guaranteed wage equal to $10,000
D) A wage equal to the income earned, minus $4000
E) A wage equal to $0 if revenue is $5000, $2000 if revenue is $7000, and $8000 if revenue is $13,000

ANSWER

E