When a Firm Pays Its Workers Above-Equilibrium Wages

question 158

Multiple Choice

When a firm pays its workers above-equilibrium wages,

• A)the moral-hazard problem is always worsened as a result.
• B)the adverse-selection problem is always worsened as a result.
• C)it may be because efficiency-wage theories are valid.
• D)the Condorcet Paradox suggests the workers will work harder than if they were paid a lower wage.

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