refer to the following information. Suppose a “fully effective” worker can produce 20 units per hour in a particular firm. The firm’s wage-productivity relationship is given by the table below:

$\begin{array}{cc}
{\text { Wage }} & \text { Output per Worker } \
\hline
{\$ 10}&20\
9 & 20 \
8 & 16 \
7 & 10 \
\end{array}$
-This firm's efficiency wage rate is:
A)$7.00
B)$8.00
C)$9.00
D)$10.00

Question

refer to the following information. Suppose a “fully effective” worker can produce 20 units per hour in a particular firm. The firm’s wage-productivity relationship is given by the table below:

$\begin{array}{cc}
{\text { Wage }} & \text { Output per Worker } \
\hline
{\$ 10}&20\
9 & 20 \
8 & 16 \
7 & 10 \
\end{array}$
-This firm's efficiency wage rate is:
A)$7.00
B)$8.00
C)$9.00
D)$10.00

Quizplus · Accepted Answer

Efficiency wage is the minimum wage paid to workers to keep them motivated and productive. The firm in question is paying wages higher than the market wage of $7. The productivity level decreases with decreasing wages, which indicates that workers are not motivated enough to produce at their full capacity at lower wages. The level of productivity stays the same at wages $9 and $10, which means that the workers are fully motivated and productive at the wage of $9. Therefore, $9 is the efficiency wage rate of this firm.

Refer to the Following Information Wage Output per Worker $1020920816710\begin{array}{cc}{\text { Wage }} & \text { Output per Worker } \\\hline{\$ 10}&20\\9 & 20 \\8 & 16 \\7 & 10 \\\end{array} Wage $10987​ Output per Worker 20201610​​

Refer to the Following Information $\begin{array}{cc}{\text { Wage }} & \text { Output per Worker } \\\hline{\$ 10}&20\\9 & 20 \\8 & 16 \\7 & 10 \\\end{array}$