Yohanna, the CEO of a Corporation Operating in Ethiopia, Decides

question 175

Multiple Choice

Yohanna, the CEO of a corporation operating in Ethiopia, decides to raise the wages of her workers, even though she faces an excess supply of labour. Which of the following is an expected result from her decision?

• A) It will increase productivity, according to the efficiency wage theory.
• B) It will help eliminate the excess supply of labour if she raises it sufficiently.
• C) It will attract a larger pool of workers to fill vacancies but of lesser quality.
• D) It will decrease profits, according to the efficiency wage theory.

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Definitions:

Willingness To Pay

The maximum amount of money a consumer is prepared to spend to obtain a good or service.

Communications Network

A system of interconnected devices or nodes that can communicate with each other to exchange data and information.

Consumer Type

A classification of individuals based on their consumption patterns, preferences, or demographic characteristics.

Willingness To Pay

The maximum amount a consumer is prepared to pay for a good or service.