How do efficiency wages help increase a firm's profits?
What will be an ideal response?
Efficiency wages are wages offered above the wage that workers would accept, where the premium is paid to increase worker productivity. It helps increase a firm's profits in a number of ways. Some of these are:
a. Efficiency wages reduce worker turnover
b. Risk of losing a high-paying job motivates employees to work harder than they otherwise would.
c. There is a possibility that employees are grateful for receiving an above-market wage, leading them to work harder.
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Assuming that the government can act immediately before the multiplier takes effect, then to offset a reduction in investment by $1 billion, government purchases must be:
A. decreased by $1 billion. B. increased by $1 billion. C. increased by $2 billion. D. increased by $0.5 billion.
The individual firm operating in a perfectly competitive labor market
A) can hire more labor only by offering a higher wage. B) faces an inelastic demand for labor. C) will pay less to the additional labor employed. D) can buy all the labor it wants at the going market wage rate.
When a country allows trade and becomes an exporter of a good,
a. the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good. b. the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good. c. the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good. d. the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.
Which of the following statements is TRUE about education in America?
A. Less than half of our high school graduates can function at the eighth grade level. B. The U.S. has the largest number of engineering students of any country of the world. C. Ninety percent of all PhD's in engineering and sciences awarded in the U.S. are foreign students. D. American's education system is second to none.