Which of the Following Statements About Efficiency Wage Theory Is

question 30

Multiple Choice

Which of the following statements about efficiency wage theory is true?

• A) Paying above the competitive equilibrium wage tends to cause workers to shirk their responsibilities.
• B) Firms do not have a choice about whether they pay efficiency wages or not because law does determine these wages.
• C) Paying the lowest possible wage is always the most efficient (profitable).
• D) Paying above the competitive equilibrium wage may improve worker health, lower worker turnover, improve worker quality, and increase worker effort.

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Definitions:

Industry Entry

The process or act of beginning to operate or participate in a specific sector or market.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices over a specified period of time.

Profit-Maximizing Price

The price level at which a company can sell its product or service to maximize its profit.

Specific Firm

A distinct company or business entity recognized for its unique product, service, or brand identity.