Paying efficiency wages helps firms reduce the problem of moral hazard by:
A)generating additional profits that can be used to improve working conditions.
B)keeping labor unions from organizing workers in the firm.
C)encouraging unsupervised workers to maintain a high level of productivity.
D)providing an incentive for the best-qualified workers to remain with the firm.

Question

Quizplus · Accepted Answer

Paying efficiency wages encourages unsupervised workers to maintain high productivity because they do not want to lose their well-paying jobs, thus reducing the problem of moral hazard.

Paying Efficiency Wages Helps Firms Reduce the Problem of Moral