An Important Theoretical Revision to Adams' Original Equity Theory Formulation

question 56

Multiple Choice

An important theoretical revision to Adams' original equity theory formulation involves individual preferences for equity.An equity sensitive individual is:

• A)someone comfortable with an equity ratio less than their comparison other
• B)someone comfortable with an equity ratio greater than that of his or her comparison other
• C)someone who prefers an equity ratio equal to that of their comparison other
• D)someone who is uncomfortable with a ratio either less or greater than comparison other

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Definitions:

Apples

Edible fruits with a sweet taste and crisp texture, coming in many varieties and colors like red, green, and yellow.

Utility Function

A mathematical representation of a consumer's preference ordering over a set of goods or outcomes, showing the level of satisfaction or utility derived from each.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute cheaper goods for more expensive ones.

Price

The amount of money expected, required, or given in payment for something, reflecting the value that consumers and sellers assign to a good or service.