Which of the following help explain why firms pay bonuses to workers during particularly profitable years to prevent workers from becoming disgruntled ?
Correct answer: D. People care about fairness
- A. people are rational maximizers
- B. People are reluctant to change their minds
- C. People are inconsistent over time
- D. People care about fairness
Explanation
Workers may view bonuses as fair recognition of their contribution during profitable years, and withholding them can create resentment even when wages are unchanged. This reflects the behavioural-economic idea that people care about fairness, not only their absolute income.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
Spending on motoring as a % of household expenditure in the UK shows that motoring is ?
Which city has the following transport policy ?
Supporters of antimonopoly enforcement argue that the real gain from such enforcement ?
Which of the following is not true about how people make decisions ?
Suppose that 40 percent of the voting population wish to spent Rs1,000 for artwork in City Hall, 25 percent wish to spent Rs20,000 and 35 percent wish to spend Rs 22,000 What is the median preferred outcome, the average preferred outcome and the modal preferred outcome ?
Which of the following best demonstrates the problem of moral hazard ?