Hernando and Fiona Have Both Been Placed in a New

question 1

Multiple Choice

Hernando and Fiona have both been placed in a new advanced math class.They both love math and are finding the enriched work fascinating.In order to increase his effort in the class,Hernando's parents give him $5 for every A that he receives on a test.Fiona's parents do not reward her for good grades.Who is likely to do better in the class,and why?

• A) Fiona, because her intrinsic motivation will aid her extrinsic motivation
• B) Hernando, because Fiona's extrinsic motivation will be low without rewards
• C) Hernando, because his intrinsic motivation will be increased by rewards
• D) Fiona, because Hernando's intrinsic motivation will be lessened by rewards

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Definitions:

Price Leadership

A market strategy where one leading company sets the price of goods or services, and other companies in the sector follow suit.

Covert Collusion

An implicit, non-public agreement between firms to fix prices, limit production, or divide markets, without explicit communication.

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the overall benefit to society.

Productive Efficiency

Occurs when a good or service is produced at the lowest possible cost, utilizing all resources efficiently.