According to the Theory of Efficiency Wages,if a Firm Stops

question 36

Multiple Choice

According to the theory of efficiency wages,if a firm stops paying efficiency wages it is likely to see a(n)

• A)increase in the number of job applicants and an increase in how long workers stay on the job.
• B)increase in the number of job applicants and a decrease in how long workers stay on the job.
• C)decrease in the number of job applicants and an increase in how long workers stay on the job.
• D)decrease in the number of job applicants and a decrease in how long workers stay on the job.

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Definitions:

Fixed Costs

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance premiums.

Full-Service Contract

An agreement that provides a complete range of services related to a specific product, property, or activity, including maintenance, repairs, and often replacements.

Profit

The financial gain achieved when the revenue from business activities exceeds the expenses, costs, and taxes involved in maintaining the operation.

Operating Loss

A financial metric representing the negative balance resulting from a company's operating expenses exceeding its revenues.