According to Behavioral Psychologists,which of the Following Compensation Packages Would

question 13

Multiple Choice

According to behavioral psychologists,which of the following compensation packages would most people rank as the least desirable?

• A) A guaranteed base salary of $54,000
• B) A base salary of $50,000, plus a 50% chance of earning a $4,000 bonus for meeting minimum productivity requirements
• C) A base salary of $54,000, with a 50% chance of sustaining a $4,000 penalty for failing to meet minimum productivity requirements
• D) Choices (b) and (c) are, by an overwhelming majority of people, ranked as being equally undesirable

---

Definitions:

Compensation

The complete sum of financial and non-financial compensation given to a worker by their employer in exchange for the work carried out as needed.

Marginal Seller

A seller who is indifferent about selling at the current market price and might leave the market if prices decrease.

Cost

Cost is the amount of money required to purchase, produce, or maintain something, encompassing both direct expenses and indirect expenditures.

Transaction Costs

Expenses incurred in buying or selling a good or service, including search and information costs, bargaining costs, and enforcement costs of policies.