It is commonly believed that the best ways to motivate an employee are (1) to improve the quality of the workplace and (2) to make the employee feel like he/she is part of the company. How would an economist analyze these statements?

What will be an ideal response?


An economist would be skeptical about these claims. The economic model shows that people respond to incentives. The economic model implies that desired changes in employee behavior can be achieved by changing the relevant costs and benefits of actions by employees.

Economics

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In which of the following ways can a corporation raise new funds for investment? I. Issuing new shares of stock II. Having existing stock resold between two owners

A) I only B) II only C) Both I and II D) Neither I nor II

Economics

A perfectly competitive employer of an input will maximize profits from the employment of the input by equating:

a. the value of the marginal product of the input with the price of the output. b. the marginal product of the last unit of the input employed with the input price. c. the input price with the price of the product produced. d. the marginal revenue product of the input with the input price. e. the marginal product of the last unit of the input employed with the price of the product produced.

Economics

Higher future living standards require:

A. reduced rates of current consumption. B. increased rates of current consumption. C. increased rates of population growth. D. reduced rates of current investment.

Economics

If in a system of fixed exchange rates the dollar price of euros is above the market equilibrium level:

A. gold will flow from the United States to Europe. B. there will be a surplus of euros. C. the U.S. government will have to ration euros to U.S. importers. D. there will be a shortage of euros.

Economics