Why would a firm pay efficiency wages?
What will be an ideal response?
An efficiency wage is a wage that is higher than the market wage. Firms pay efficiency wages to raise productivity. Studies show that workers are motivated to work harder if they are paid higher wages. Put differently, a firm does not monitor workers as closely in order to get them to be more productive. The higher wage motivates them to be productive.
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Common pool resources differ from pure public goods in that
A) common pool resources are resources that cannot be renewed but the production of pure public goods can be increased at any time. B) common pool resources are nonexcludable while pure public goods are excludable to those who do not pay of the good. C) unlike pure public goods, common pool resources are rival in consumption. D) common pool resources are collectively owned by a group of people while pure public goods are owned by the government.
Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases
a. the inflation rate and real interest rates. b. the inflation rate, but not real interest rates. c. real interest rates, but not the inflation rate. d. neither the inflation rate nor real interest rates.
Which of the following countries has the lowest export ratio?
A. Canada. B. Kuwait. C. Sweden. D. The United States.
If a two-person household moves from Miami to Atlanta, which of the following can describe the household?
A. Neither member of the household is a tied mover. B. One member of the household is a tied mover while the other is a tied stayer. C. Both members of the households are tied movers. D. One member of the household is a tied stayer. E. Neither member of the household is a tied stayer.