According to the theory of efficiency wages,if a firm stops paying efficiency wages it is likely to see a(n)
A)increase in the number of job applicants and an increase in how long workers stay on the job.
B)increase in the number of job applicants and a decrease in how long workers stay on the job.
C)decrease in the number of job applicants and an increase in how long workers stay on the job.
D)decrease in the number of job applicants and a decrease in how long workers stay on the job.

Question

Quizplus · Accepted Answer

The theory of efficiency wages posits that firms offer higher wages to motivate workers to increase their productivity and reduce turnover. If a firm stops paying efficiency wages, it is likely to see a decrease in worker productivity and an increase in turnover, leading to a decrease in the number of job applicants and a decrease in how long workers stay on the job. Therefore, the best choice is (D).

According to the Theory of Efficiency Wages,if a Firm Stops