Susan is a plant manager in charge of a factory in a relatively poor country.Even though market wages are low,she decides to raise the wages of her workers.Her decision
A)might increase profits if it means that the wage is high enough for her workers to eat a nutritious diet that makes them more productive.
B)will help eliminate the excess supply of labor.
C)may cause her workers to reduce the effort they expend at their jobs.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

By raising the wages of her workers, Susan may improve their standard of living and enable them to afford a nutritious diet. This can lead to increased productivity, which can ultimately increase profits for the company. Option B is not correct because raising wages may actually create excess demand for labor, due to workers from other firms seeking higher pay. Option C may be true in some cases, but it is not necessarily a universal outcome of higher wages.

Susan Is a Plant Manager in Charge of a Factory