Module 5: Discussion 9 - Stock Option Plan
At the recent shareholder meeting, the CEO of a small bank proposed a plan to offer each of its employees 250 incentive options for Class A common stock. The key provisions of the plan are that employees must exercise the options between January 2014 and December 2019, and if an employee terminates his or her employment with the bank (or is terminated), the options are no longer exercisable. One shareholder vehemently objected to the plan, claiming that such a move would dilute the value of the outstanding shares. As CEO, how would you defend the stock option plan to the shareholders?

Create a 250-350-word narrative to defend the stock option plan.

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Factors that may influence a firm's decision to buy goods rather than produce goods internally include a lack of in-house expertise, small volume requirements, a desire for multiple sourcing, and the fact that the item may not be critical to the firm's strategy. Additional consideration may be given if the firm has the opportunity to work with a company that has provided outsourced services successfully in the past and can sustain a long-term relationship (Kenton, 2019).

Additionally, most businesses make decisions not only about how many workers to employ at any given point in time (e.g., the amount of labor) but also about the scale of an operation (e.g., size of factory, office) to put together and which production processes to use. Therefore, the long run is defined as the time horizon necessary to not only change the number of workers but also to scale the size of the factory up or down and alter production processes as desired.

If you were a manager at Ford, what information would you need to make decisions about the production of a vehicle like the Ford Fusion? In your answer, please include information about number of employees, factory size, office space, production processes, and scale of operation.

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An economics professor and her husband went out to dinner and she observed one of her students drinking alcoholic beverages to excess. The professor knew the economics final exam was scheduled for the next morning. When the professor's husband realized that the student was in his wife’s economics class, he described the student’s behavior as irrational. The professor disagreed.

Under what conditions is behavior irrational according to the properties of consumer behavior discussed in the chapter? What situations could make the student's behavior rational?

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In modules 1 and 2, we identified two broad groups of economic factors; households and firms. In our study of demand, we looked at households as consumer units affecting demand for goods and services in the product market. On the supply side of the product market are the economic (or business) firms that are the producers (and sellers) of goods and services.

When economic times get tough, some businesses experience downturns that lead to the loss of jobs or going out of business. However, there are some businesses that survive and often thrive as a result of economic struggles.

Drawing on what you have learned so far, what type of products or business would survive in a recession? Please discuss individual behavior theory in support of your choice (Expertsmind).

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Reference:

Expertsmind. (n.d.). Question regarding the behavior and production

Housing supply and demand is an example of the effects supply and demand can have on price elasticity. The most recent housing boom from 2000-2005 was not only a boom in housing prices, but also in-house construction.

Based on your readings, there are a number of factors that determine housing prices. Some are based on economic theories and some are based on more intangible factors. Describe the key economic factors which effect housing prices and how they are determined (HomeGuru).

You must first post your answer(s) before you can see the other students’ posts. Submit your initial post(s) early in the Module.