The Theory of Efficiency Wages Suggests That Firms May Pay

question 39

Multiple Choice

The theory of efficiency wages suggests that firms may pay above-equilibrium wages

• A)to reduce employee turnover.
• B)to prevent unions from recruiting members.
• C)to reduce the need for minimum wage laws.
• D)to increase the demand for better-skilled workers.

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Definitions:

Discounts Lost

Costs incurred by a company for not taking advantage of purchase discounts offered by suppliers or creditors.

Late Payments

Late payments are amounts due that are not paid by their due date, often resulting in additional charges or penalties.

Inventory Returns Estimated

The anticipated amount of goods that will be returned to inventory due to cancellations, defects, or unsatisfactory products.

Current Liabilities

Obligations a company must fulfill within the forthcoming fiscal year, including debts, accounts payable, and other short-term financial responsibilities.