Question

A firm may pay efficiency wages in an attempt to a. entice workers to work the night shift rather than the day shift. b. improve productivity by reducing turnover. c. reduce costs by attracting the least-skilled workers to apply for job vacancies. d. All of the above are correct.

Answer 1

the answer is: B) improve productivity by reducing turnover.

Step-by-step explanation:

The efficiency weigh theory states that when employers increase their employees' wages above average market wages, they will earn higher profits due to:

• An increase in labor productivity since the employees are very motivated to work in the company and employee turnover decreases.
• The increase in labor productivity and the decrease in employee turnover will offset the increase in costs due to higher wages.