Three Employers Have Justified Their Actions as Follows

question 30

Multiple Choice

Three employers have justified their actions as follows.Whose logic is not consistent with the logic of efficiency wage theory?

• A)Instead of spending money on an electronic timing system that monitors worker hours,Tom spends an equivalent amount of money on higher wages.
• B)Dick pays his workers less than the equilibrium wage so that they will not have the time or money to look for work somewhere else.
• C)Harry pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive.
• D)None of the above is consistent with the logic of efficiency wage theory.

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Definitions:

Poverty Threshold

The minimum level of income deemed adequate in a particular country to maintain a standard of living.

Family Size

The number of individuals living in a household, often impacting economic decisions and living standards.

Lorenz Curve

A graphical representation of income or wealth distribution within a society, indicating the degree of inequality.

Income Distribution

The way in which a nation’s total earnings are spread among its population, which can influence social and economic stability.