A Firm May Pay Efficiency Wages in an Attempt to

question 8

Multiple Choice

A firm may pay efficiency wages in an attempt to

• A)entice workers to work the night shift rather than the day shift.
• B)improve productivity by reducing turnover.
• C)reduce costs by attracting the least-skilled workers to apply for job vacancies.
• D)All of the above are correct.

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Definitions:

Irrational Behavior

Actions or decisions that contradict logic or reasoning, often deviating from expected or standard behavior.

Overconfidence

A cognitive bias where an individual overestimates their own ability, knowledge, or control over events.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Loss Aversion

Oversensitivity to loss, leading to an unwillingness to recognize a loss and move on.