According to the Theory of Efficiency Wages

question 12

Multiple Choice

According to the theory of efficiency wages:

• A)firms may choose to pay a wage above the competitive equilibrium level to reduce worker turnover
• B)firms will pay a higher wage to impose a cost on shirking
• C)firms will pay a high wage to provide an incentive to work hard
• D)all of the above

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Definitions:

Voting Shares

Shares of a company that provide the shareholder the right to vote on corporate matters, such as the election of the board of directors.

Open Market

A market where buying and selling of goods and services take place with minimal restrictions or regulations, often referring to the stock market.

Ownership Percentage

The fraction or percentage of a company that is owned by a shareholder or group of shareholders.

Voting Shares

Shares that give the shareholder the right to vote on corporate matters.