Which of the Following Is a Plausible Explanation for a Firm

question 1

Multiple Choice

Which of the following is a plausible explanation for a firm paying above-equilibrium wages to its workers?

• A)It increases the probability that a worker who shirks will be caught.
• B)It discourages workers from shirking out of fear of losing their high-paying job.
• C)The Condorcet Paradox suggests that paying high wages will result in greater effort by employees.
• D)By paying a high wage, employers solve this adverse selection problem and motivate the employees to work harder.

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Definitions:

Need for Competence

An individual's inherent desire to effectively interact with their environment, demonstrating skillfulness and mastery in their tasks or activities.

Need for Power

A psychological trait described by David McClelland as the desire to influence, teach, or encourage others to achieve.

Need for Affiliation

The desire to form connections with others and be part of a group or community.

Need for Competence

An individual's intrinsic desire to be effective in dealing with the environment and to master complex tasks.