The Theory of Efficiency Wages Suggests That Firms May Pay

question 39

Multiple Choice

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

• A)to reduce employee turnover.
• B)to prevent unions from recruiting members.
• C)to reduce the need for minimum wage laws.
• D)to increase the demand for better-skilled workers.

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Definitions:

Environmental Change

Alterations to the natural or human-made surroundings, often referring to significant shifts in climate or ecosystems.

Takes Initiative

The action of taking charge, performing tasks, or making decisions independently without needing direct instructions or supervision.

Highly Self-Confident

Describes an individual who has a strong belief in their own abilities, skills, and judgment.

Ignoring Potential

Failing to recognize or utilize the abilities, skills, or talents that individuals or situations possess, often leading to missed opportunities for growth or improvement.