Recall the Application About the Experiment in Which Chinese Factory

question 100

Multiple Choice

Recall the Application about the experiment in which Chinese factory workers were divided into groups
and offered bonuses for their production output to answer the following question(s) .
-According to the Application, workers who were told they would lose their bonuses if their output fell short of the production target were more productive than those workers who were offered a bonus if they met the production target. This is an example of which element of the economic way of thinking?

• A)responding to incentives
• B)thinking at the margin
• C)isolating variables
• D)using assumptions to simplify

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Definitions:

Planning Budget

A budget designed for a specific level of activity, often used as a tool for performance evaluation and cost management.

Net Operating Income

The profit a company makes from its normal business operations, excluding expenses from financing and taxes.

Service Company

A business that provides intangible products, such as services or expertise, rather than physical goods.

Cost Formula

An equation used to calculate the total cost of production, involving fixed and variable components.