Which Statement by an Employer Is Consistent with the Efficiency

question 53

Multiple Choice

Which statement by an employer is consistent with the efficiency wage theory?

• A)"I pay more than the going rate so that my employees work hard."
• B)"I pay only enough to attract workers who are at the bottom of the pay scale."
• C)"I love it when unemployment goes up because that drives down my wage costs."
• D)"Workers can always find jobs,if only they lower their expectations."
• E)"Unions have only their current members' interests at heart."

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Definitions:

Demand Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity demanded for it over a given period of time.

Marginal Product

Marginal product refers to the additional output produced as a result of adding one more unit of a specific input, while holding other inputs constant.

Resource

An economic or productive factor required to accomplish an activity, or as a means to undertake an enterprise and achieve desired outcome.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource, such as labor.