Efficiency-Wage Theory Suggests That to Improve Workers Performance, Firms Should

question 54

Multiple Choice

Efficiency-wage theory suggests that to improve workers performance, firms should:

• A)fire all existing workers and hire new ones
• B)spend more money and effort on monitoring
• C)raise wages above the market equilibrium level
• D)give incentive pay to employees for dobbing in their fellow workers who are shirking

---

Definitions:

Larva

The immature, wingless, and often worm-like stage in the life cycle of insects, before they transform into adults.

Pupa

A transitional stage of a developing insect, after larva and before adulthood, during which it undergoes transformation.

Cocoon

A protective casing spun by the larvae of many insects, inside which they undergo metamorphosis into their adult form.

Caterpillar

The larval stage of butterflies and moths, often recognized by its elongated body, multiple legs, and the ability to transform into a butterfly or moth.