An employer and a worker,if both are honest and work hard,together produce $200,000 a year,of which the employer gets $50,000 and the worker $150,000.If either one is dishonest and lazy,they break up,the employer employs someone else and the worker gets another employer.The following shows what they might earn if they broke up.In which case is it likely that both the employer and the worker will be honest and hard-working?
A) If they break up, the employer makes $60,000 and the worker $80,000.
B) If they break up, the employer makes $20,000 and the worker $175,000.
C) If they break up, the employer makes $75,000 and the worker $175,000.
D) If they break up, the employer makes $25,000 and the worker $125,000.

Question

Quizplus · Accepted Answer

If they break up, the employer will earn $25,000 and the worker will earn $125,000. This is the scenario where both the employer and the worker will be motivated to be honest and hardworking because if either of them becomes dishonest or lazy, they stand to lose a lot of money. The employer only earns $25,000 in this scenario, which is the lowest amount compared to the other options, so they have the most to lose if they become dishonest or lazy. Likewise, the worker in this scenario earns less than they would if they broke up and formed a new partnership, so they have a strong incentive to work hard and maintain the partnership with the current employer. Overall, this scenario provides the strongest motivation for both the employer and the worker to be honest and hardworking.

An Employer and a Worker,if Both Are Honest and Work