a : level of work
b : level of gold given
c : level of food given

These are relative value. There a egal to zero when they are at the average value depending on the gouvenment.

The effect on happiness on a city with a population = p is :
S = b+c-1
- S = 0 : no change
- S > 0 : +2 Happy
- S < 0 : Happy = p * S (negative value)

Example :

With a Tyrany average value are (level 0):
Work : 10h/day
gold : 3 gold / population unit
food : 7,5 food unit / population unit

If you change value for this :
work : 10h +2h (a = +1 level)
gold : 3 + 2 gold (b = +2 levels)
food : 7.5( (c = +0 level)

S = (2 + 0) - 1 = 1.

S > 0 so you will have for each city +2 happy points.

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If you choose :
work : 10h +2h (a = +1 level)
gold : 3 (b = +0 level)
food : 7.5 - 2.5 ( (c = -1 level)

In a city with a population of 5 units, you will have +10 unhappiness points.
S = (9 - 1) - 1 = -2
Happiness = 5 * (-2) = -10

Graphical bugs :
If you give more food or more gold or make people work less (At least two condition must be truth) you will not see the +2 happy bonus on the Happyness screen of your cities. But the bonus still exist in the value of % of people happy.