If an employer believes in the theory of efficiency wages, he will raise wages in effort to do which of the following?
A)increase worker effort and increase worker turnover
B)increase worker effort and decrease worker turnover
C)decrease worker effort and increase worker turnover
D)decrease worker effort and decrease worker turnover

Question

Quizplus · Accepted Answer

According to the theory of efficiency wages, higher wages can motivate workers to increase their effort and reduce shirking. This can lead to higher productivity and profits for the firm. Additionally, higher wages can attract more qualified and motivated workers, leading to lower turnover rates. Therefore, option B (increase worker effort and decrease worker turnover) is the best choice.

If an Employer Believes in the Theory of Efficiency Wages