Paying Efficiency Wages Helps Firms Reduce the Problem of Adverse

question 2

Multiple Choice

Paying efficiency wages helps firms reduce the problem of adverse selection by:

• A) generating additional profits that can be used to pay for more proficient hiring managers.
• B) keeping labor unions from organizing workers in the firm.
• C) encouraging unsupervised workers to maintain a high level of productivity.
• D) providing an incentive for the best-qualified workers to remain with the firm.

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Definitions:

Threshold

The minimum level of stimulation or the level at which a certain effect begins to be produced, often used in economics, psychology, and physical sciences.

Grades

Levels of quality or performance, often used to categorize or rank things such as academic results or material purity.

Employers

Individuals or organizations that hire and pay employees for their labor.

Educational Level

The highest degree or level of school completed, often influencing employment opportunities, income potential, and social status.