Communal Returns to Work Often Lead to Low Worker Effort

question 94

Multiple Choice

Communal returns to work often lead to low worker effort. Why does this happen? I. It happens because of the free-rider problem. II. Since the final payout depends on the number of people in the pool rather than an individual worker's effort, a worker does not have much incentive to work. III. It happens because workers learned from seeing the Chinese experience during ―The Great Leap Forward.‖

• A) I only
• B) II only
• C) III only
• D) I and II only

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Definitions:

Total Costs

The sum of all costs incurred in the production of goods or provision of services, including both fixed and variable costs.

Profit-Maximizing Price

The price level at which a company can sell its products or services to achieve the highest profit, considering the cost of production and market demand.

Pure Monopolist

A market structure where a single firm is the sole producer of a product or service, having significant control over its price.

Economic Profit

The difference in total funds acquired and total expenditures, both straightforward and oblique, for a corporation.