Which of the following is not an example of efficiency wages?
A)More productive workers are paid more to reflect their higher output.
B)Higher wages induce higher output from workers.
C)Better quality applicants apply for jobs that pay above-equilibrium wages.
D)Workers are less likely to leave jobs that pay above-equilibrium wages.

Question

Quizplus · Accepted Answer

Option A is not an example of efficiency wages because it simply reflects higher output, rather than providing an incentive for workers to increase their output. Efficiency wages are designed to increase worker output above what it would be at market equilibrium. Options B, C, and D all provide incentives for workers to increase their productivity or remain in their jobs, which are key features of efficiency wages.

Which of the Following Is Not an Example of Efficiency