Efficiency Wage Theory Says That Sometimes High Wages May

question 25

Multiple Choice

Efficiency wage theory says that sometimes high wages may:

• A)increase efficiency if they reduce "shirking"
• B)lower labour costs if they increase the need to supervise employees
• C)lower labour costs if they attract low-quality applicants
• D)increase efficiency if they increase turnover
• E)increase efficiency if they reduce worker effort

---

Definitions:

Sound Alike

Words or phrases that are pronounced in a similar way but may have different meanings or spellings, often leading to confusion.

Short-term Memory

The capacity for holding, but not manipulating, a small amount of information in mind in an active, readily available state for a short period of time.

Capacity

The maximum amount that something can contain or the ability to perform or produce.

Broadbent

Refers to Donald Broadbent, a British cognitive psychologist known for his research on attention and the filtering of information.