Equity Theory Predicts That People Are Most Satisfied in Their

question 16

Multiple Choice

Equity theory predicts that people are most satisfied in their relationships when the

• A) perceived rewards of the relationship are equal to the perceived costs of the relationship.
• B) perceived rewards of the relationship outweigh the perceived costs of the relationship.
• C) rewards and costs one partner experiences are roughly equal to those of the other partner.
• D) actual rewards and costs of the relationship exceed the expected rewards and costs of the relationship.

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Definitions:

Monetary Compensation

The financial payment given to an employee for their services or to an individual as a settlement.

Human Capital Theory

An economic perspective that views individuals' skills, knowledge, and experience as productive assets that can improve their earnings and contribute to a country's economic growth.

Labor Markets

The supply and demand for labor, where employers seek to hire workers, and individuals look for employment.

Compensating Differential

The difference in wages that arises to compensate workers for the non-monetary aspects of different jobs, like risk levels, working conditions, or job location.