A Firm Uses an Efficiency Wage Scheme to Deter Workers

question 56

Multiple Choice

A firm uses an efficiency wage scheme to deter workers from shirking,which is detected 10% of the times.Suppose a risk-neutral worker that has a reservation wage of $500.The efficiency wage paid by this firm is $7,000.What is the industry ongoing wage?

• A) $1,000
• B) $5,000
• C) $1,500
• D) $2,000

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Definitions:

Botanist

A scientist who studies plants, including their physiology, structure, genetics, ecology, distribution, classification, and economic importance.

Apical Meristem

The growth region in plants located at the tips of roots and shoots, where cells divide actively, leading to elongation.

Growing Root

The part of a plant that typically grows downward into the soil, anchoring the plant and absorbing water and nutrients.

Cell Division

A process by which a cell divides into two or more cells, a fundamental aspect of the life cycle in both eukaryotic and prokaryotic organisms.