An efficiency wage: A. is higher than the market wage and tends to increase productivity B. is...

Question:

An efficiency wage:

A. is higher than the market wage and tends to increase productivity

B. is lower than the market wage and tends to increase productivity

C. is higher than the market wage and tends to decrease productivity

D. is lower than the market wage and tends to decrease productivity

Productivity of Factor Inputs:

The productivity of factor inputs signifies the total quantity of output the factor generates within a given period. The factor inputs are laborers and capital, respectively. Higher productivity among laborers suggests that the laborers can produce a large output level in less period.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

The correct option is (A.) is higher than the market wage and tends to increase productivity.

The efficiency wage indicates the wages higher than the...

See full answer below.


Learn more about this topic:

Loading...
Efficiency Wage Theory & Impact on Labor Market

from

Chapter 6 / Lesson 9
6.5K

Employee loyalty and productivity can be increased by using the efficiency wage theory. Explore this theory, learn how it impacts the labor market, and discover why companies use it.


Related to this Question

Explore our homework questions and answers library