What Is the Most Likely Result of Efficiency Wages

question 4

Multiple Choice

What is the most likely result of efficiency wages?

• A) reduced labour-force participation rates
• B) reduced natural rate of unemployment
• C) reduced incentive to shirk responsibilities
• D) increased worker turnover

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Definitions:

Labor

Human effort, either physical or mental, used in the production of goods and services.

Capital

Financial assets or the financial value of assets, such as cash and buildings, used by a business to produce goods or services.

Least-Cost Combination

An economic principle where firms aim to achieve the lowest possible cost of production by efficiently combining resources.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, while holding other inputs constant.