According to the _____,workers may earn a wage rate higher than the value of their marginal product because it provides an incentive to perform efficiently.
A)marginal productivity of income distribution theory
B)efficiency-wage model
C)diminishing-returns theory
D)increasing-returns model

Question

Quizplus · Accepted Answer

The efficiency-wage model explains why workers may earn higher wages than their marginal product by providing an incentive for them to work more productively. This model suggests that higher wages lead to lower turnover rates and increased job satisfaction, which in turn lead to higher productivity and quality of work. Therefore, employers may choose to pay higher wages to motivate their workers to perform better.

According to the _____,Workers May Earn a Wage Rate Higher