ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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their key element is an explanation of why the efficiency (or productivity) of workers depends on the real wage.
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the rationale underlying those models implies that firms will set the real wage above the market clearing level.
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they explain a real wage rigidity.
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all of the above
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Detailed explanation-1: -Efficiency Wage theory can be split into four ways that paying a higher wage can improve your organisations production. These are: decreased shirking, increased retention, higher quality recruits, and healthier employees.
Detailed explanation-2: -Efficiency wages refer to employers paying higher than the minimum wage to retain skilled workers, increase productivity, or ensure loyalty. Efficiency wage theory helps explain why firms are reluctant to cut wages even in the face of increased competition or during economic downturns.
Detailed explanation-3: -Answer and Explanation: An efficiency wage is an above-market wage that minimizes a firm’s labor cost per unit of output.
Detailed explanation-4: -Correct answer is B. The surplus of labor in the labor market leads to unemployment, because one worker may not be lucky to find job and other worker with the same job’s qualifications and work history is able to find job.