Workers Thrive When They Feel Respected Sarah’s boss gave her complete autonomy but the new boss by-passed Sarah to deliver directives to her team and changed many of her decisions.

Despite being well paid, Sarah resigned. She felt disrespected. An earlier survey found that trust in management is a big component of job satisfaction. Say you get a new boss and your trust in management goes up a bit (say, up 1 point on a 10-point scale). That’s like getting a 36-percent pay raise.

In other words, that increased level of trust will boost your level of overall satisfaction in life by about the same amount as a 36-percent raise would.

a. Measure trust in management on a 10-point scale, measure pay on the same 10-point scale, and think of them as two goods.

Sketch an indifference curve (with trust on the x-axis) that is consistent with the news clip.

b. What is the marginal rate of substitution between trust in management and pay according to this news clip?

c. What does the news clip imply about the principle of diminishing marginal rate of substitution? Is that implication likely to be correct?