The Theory of Efficiency Wages Explains Why

question 109

Multiple Choice

The theory of efficiency wages explains why

• A)setting wages at the equilibrium level may increase unemployment.
• B)it may be in the best interest of firms to offer wages that are above the equilibrium level.
• C)the most efficient way to pay workers is to pay them according to their skills.
• D)it is efficient for firms to set wages at the equilibrium level.

---

Definitions:

United Mine Workers

A labor union that represents coal miners in the United States and Canada, advocating for workers' rights and safety since its founding in 1890.

Industrial Freedom

The concept of allowing industries to operate with minimal government intervention, emphasizing free markets and competition.

John Lewis

John Lewis was an American politician and civil rights leader who served as a U.S. Representative for Georgia's 5th congressional district from 1987 until his death in 2020, known for his role in the Civil Rights Movement.

Labor Militancy

Labor Militancy refers to a more aggressive and confrontational approach within the labor movement, often involving strikes, protests, and other direct action tactics to secure workers' rights and demands.