An efficiency wage is
A)lower than a living wage.
B)unfair to employers.
C)a wage rate above the employees' opportunity cost.
D)unlikely to be paid when monitoring is available.

Question

Quizplus · Accepted Answer

An efficiency wage is a wage rate above the employees' opportunity cost. It is paid to promote better performance and reduce turnover, as employees are more likely to work harder and stay with the company if they feel that they are being fairly compensated for their efforts. This can ultimately lead to cost savings for the employer, making it a beneficial strategy in the long run.

An Efficiency Wage Is