If the value of your marginal product is 100 and you are being paid 80, which of the following is the most plausible reason that you remain with the firm?
A)You value the high rank and leadership role as well as the salary that your position offers.
B)You have no other options so you stay or go unemployed.
C)You are altruistic and want to contribute to the firm's normal profit.
D)You have no way of knowing the value of your marginal product so you feel OK about the salary of 80.

Question

Quizplus · Accepted Answer

The fact that the employee values the high rank and leadership role suggests that they may be interested in other non-monetary benefits of the job beyond a simple calculation of their marginal product and salary. This goes beyond the assumptions of rational behavior in standard economic models, but highlights the importance of considering individual motivations beyond financial incentives.

If the Value of Your Marginal Product Is 100 and You