The Theory of Efficiency Wages Explains Why

question 109

Multiple Choice

The theory of efficiency wages explains why

• A)setting wages at the equilibrium level may increase unemployment.
• B)it may be in the best interest of firms to offer wages that are above the equilibrium level.
• C)the most efficient way to pay workers is to pay them according to their skills.
• D)it is efficient for firms to set wages at the equilibrium level.

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Definitions:

Business Ethics

moral principles and standards that guide behavior in the world of commerce, influencing company policies and practices.

Profit Motive

The intent to engage in activities or transactions for the purpose of earning financial gain or profit.

Business Ethics

An area of practical ethics focused on analyzing moral dilemmas and ethical concerns emerging within business settings.

Ethics Of Care

The ethical theory that emphasizes human interaction, holding that what makes a decision ethical is how well it builds and promotes human relationships.