Four Employers Have Justified Their Actions as Follows

question 182

Multiple Choice

Four employers have justified their actions as follows. Whose logic is consistent with the logic of efficiency wage theory?

• A) Jay develops a new assembly line technology that limits the amount shirking workers may do, so he reduces what he pays his employees so as to make it closer to the equilibrium wage.
• B) Kay pays her workers less than the equilibrium wage so they won't have the time or money to look for work somewhere else.
• C) Ray pays his workers in a developing country more than the going wage, hoping that they will get a better diet and so be more productive.
• D) Ms. Fay pays her workers the market wages, but she hires more supervisors to make sure workers do not shirk.

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Definitions:

Desirable Outcomes

Positive results or benefits that are sought after or desired by individuals or organizations from their actions or operations.

Productivity

The measure of efficiency in converting inputs into useful outputs, typically in terms of the rate of output per unit of input.

Groundbreaking Ceremony

A formal event marking the beginning of construction or the start of a major project.

Company President

A high-ranking executive in a company, often responsible for formulating and implementing policies alongside the board of directors and CEO.