Efficiency wages are ____ that raise _____?
Correct answer: C. high wages, productivity
- A. low wages, employment
- B. high wages, labor supply
- C. high wages, productivity
- D. high wages, employment
Explanation
Efficiency wages are deliberately high wages paid to encourage effort, reduce shirking and attract or retain productive workers. Their main intended effect is higher labour productivity, not simply greater employment.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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