What Would Be the Predicted Result of Overpaying a Piece-Rate

question 137

Multiple Choice

What would be the predicted result of overpaying a piece-rate worker, according to equity theory?

• A) The employee will seek a higher wage.
• B) Quality will increase.
• C) There will be no effect.
• D) Quantity will increase.
• E) Quality will decrease.

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Definitions:

Demand Increases

A situation where consumers are willing and able to purchase more of a product or service at the same price, shifting the demand curve to the right.

Supply Decreases

This term describes a situation in which the quantity of a good or service that producers are willing and able to offer for sale at various prices diminishes.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the market equilibrium price.