Paying Efficiency Wages Helps Firms Reduce the Problem of Moral

question 98

Multiple Choice

Paying efficiency wages helps firms reduce the problem of moral hazard by:

• A) generating additional profits that can be used to improve working conditions.
• B) matching the wages each worker is paid to the number of units of output each worker produces.
• C) encouraging unsupervised workers to maintain a high level of productivity.
• D) providing an incentive for the best-qualified workers to remain with the firm.

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Definitions:

Cellular Respiration

The process by which cells convert glucose and oxygen into ATP, releasing carbon dioxide and water.

Inspiration

Act of taking air into the lungs; inhalation.

Gases Exchange

The process of oxygen and carbon dioxide moving between the bloodstream and the lungs in animals, and the atmosphere and cells in plants.

Diffusion

The process by which molecules spread from areas of high concentration to areas of low concentration, often leading to equilibrium.