The basic idea that underlies the theory of salaries as tournament prizes is that:
A) Workers are paid according to the 1/N rule of compensation.
B) Workers are paid according to their rank in a classification of the own, individual performances.
C) Workers are paid according to the average revenue product of individuals within a class of workers.
D) Workers are paid according to their own, individual values of marginal revenue product.

Question

Quizplus · Accepted Answer

The theory of salaries as tournament prizes posits that compensation is based on the relative performance or rank of individuals within an organization, rather than on their absolute level of output or productivity. This encourages competition among employees for higher ranks and the associated rewards.

The Basic Idea That Underlies the Theory of Salaries as Tournament