In this chapter, a simple model was developed in which it was predicted that workers employed in jobs paying wages less than they could get in comparable jobs elsewhere would tend to quit to seek higher-paying jobs. Suppose we observe a worker who, after repeated harassment or criticism from her boss, quits an $8-perhour job to take another job paying $7.50.

Answer the three questions below:

a. Is this woman’s behavior consistent with the economic model of job quitting outlined in the text?

b. Can we test to see whether this woman’s behavior is consistent with the assumption of rationality?

c. Suppose the boss in question had harassed other employees, but this woman was the only one who quit. Can we conclude that economic theory applies to the behavior of some people but not to others?