Which of the Following Is Not an Example of Efficiency

question 106

Multiple Choice

Which of the following is not an example of efficiency wages?

• A)More productive workers are paid more to reflect their higher output.
• B)Higher wages induce higher output from workers.
• C)Better quality applicants apply for jobs that pay above-equilibrium wages.
• D)Workers are less likely to leave jobs that pay above-equilibrium wages.

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Definitions:

Bilateral Contract

An agreement between two parties in which each party commits to performing a specific obligation.

Consideration

In a contractual agreement, it is the value or promise that each party agrees to exchange.

Promissory Estoppel

A legal principle that enables a party to recover on a promise made when they have reasonably relied on that promise to their detriment, even if a formal contract does not exist.

Illusory Contract

An agreement that fails to bind at least one of the parties due to the lack of a definite promise or because the terms allow for withdrawal without consequence.