A firm uses an efficiency wage scheme to deter workers from shirking.Suppose a risk-neutral worker that has a reservation wage of $1000.The industry ongoing wage is $2,000.The efficiency wage paid by this firm is $7,000.What is this firm's shirking detection rate?
A) 5%
B) 20%
C) 10%
D) 25%

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The Answer of A firm uses an efficiency wage scheme to deter workers from shirking.Suppose a risk-neutral worker that has a reservation wage of $1000.The industry ongoing wage is $2,000.The efficiency wage paid by this firm is $7,000.What is this firm's shirking detection rate?
A) 5%
B) 20%
C) 10%
D) 25%

A Firm Uses an Efficiency Wage Scheme to Deter Workers