Wages set above the equilibrium wage by
A)firms to increase morale are called collective bargaining wages.
B)lawmakers to decrease cyclical unemployment are called minimum wages laws.
C)firms to increase productivity are called efficiency wages.
D)lawmakers to decrease the length of a job search are called efficiency wages.

Question

Quizplus · Accepted Answer

Wages set above the equilibrium wage by firms to increase productivity are called efficiency wages. This is because firms believe that by paying higher wages, they can motivate workers to be more productive, which can ultimately lead to higher profits for the company. Choosing option A is incorrect because collective bargaining wages are set through negotiation between firms and workers' unions, not unilaterally by the firms themselves. Option B is incorrect because minimum wage laws are set by lawmakers, not firms. Option D is incorrect because efficiency wages are set by firms, not lawmakers.

Wages Set Above the Equilibrium Wage by