Suppose New Electronic Devices Make It Easier to Monitor the Effort

question 99

Multiple Choice

Suppose new electronic devices make it easier to monitor the effort levels of workers. If some shirking is still possible in the efficiency wage model, what happens to the efficiency wage?

• A) Declines, but remains above the market-clearing wage
• B) Declines, and falls below the market-clearing wage
• C) Increases
• D) Does not change

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