An efficiency wage exists when an employer pays an employee more than the equilibrium wage to motivate the employee to work hard.False

Name: An efficiency wage exists when an employer pays an employee more than the equilibrium wage to motivate the employee to work hard.False
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Question

Quizplus · Accepted Answer

An efficiency wage is a wage paid by an employer that is higher than the market equilibrium wage in order to motivate employees to work harder and increase productivity.

An Efficiency Wage Exists When an Employer Pays an Employee