Consider Two Firms a and B

question 65

Essay

Consider two firms A and B.Firm A notices that its total costs have declined by 10 percent each time its cumulative output has doubled.Firm B notices that its average cost of production declined by 10 percent after it increased production by 5 percent and hired 50 more workers to work with its existing unused equipments.Explain graphically whether the experiences of these two firms will have similar implications on the long run average cost of production.

Compare and contrast the effects of goal setting on complex versus straightforward tasks, including when specific learning goals are preferable.

Understand the mechanisms through which goal setting enhances performance, including direction, effort, persistence, and feedback.

Describe the relationship between equity perception, motivational outcomes, and behavior, such as reduced input or employee theft.

Understand how social comparison processes under equity theory influence perceived fairness and motivation.

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Definitions:

Collectivism

A cultural orientation prioritizing the goals and well-being of the group over the individual, emphasizing interdependence, cooperation, and social harmony.

Fundamental Attribution Error

The tendency for observers to attribute other people's behavior to internal or dispositional factors and to downplay situational factors.

Overjustification Effect

The phenomenon where introducing an external incentive for an already internally motivated activity reduces intrinsic motivation.

Materially Breached

The violation of a contract that is so substantial it significantly impacts the contract's purpose, justifying the other party's termination of the agreement.