One reason why the lowest wage rate is not necessarily the same as the efficiency wage is that workers might:
A) Be more productive at a higher wage rate
B) Have more incentive to shirk at higher wage rates
C) Be tempted to switch jobs more frequently at higher wage rates
D) Be less inclined to work well at a higher wage rate

Question

Quizplus · Accepted Answer

Efficiency wage theory suggests that paying workers a higher-than-market wage can lead to increased productivity and lower turnover. However, this assumes that all workers are equally productive at all wage rates. In reality, some workers may be more productive at higher wage rates, while others may not work as well. Therefore, the lowest wage rate that ensures good performance may not be the same as the efficiency wage.

One Reason Why the Lowest Wage Rate Is Not Necessarily