Which of the following affects the wage a firm is willing to pay its workers?
A) the productivity of workers
B) consumer demand for the goods and/or services that the firm creates
C) the amount of fringe benefits the firm is required by law to pay
D) the level of payroll taxes the firm must pay
E) All of the above affect the wage a firm is willing to pay its workers.

Question

Quizplus · Accepted Answer

All the options listed directly impact the wage a firm is willing to pay its workers. Worker productivity influences wage levels because more productive workers typically generate more value for the firm, justifying higher wages. Consumer demand affects a firm's revenue and, consequently, its ability to pay wages. The cost of fringe benefits and payroll taxes increases the total cost of employing a worker, which can affect the cash wage the firm is willing to offer.

Which of the Following Affects the Wage a Firm Is