An efficiency wage is: A) above the equilibrium wage and is paid to provide workers with an incentive increase productivity. B) efficient because it is exactly equal to the wage rate implied by the marginal productivity theory. C) determined by collective bargaining between unions and management. D) equal to the value of the marginal product of laboradjusted so as to make the structure of compensation more equitable.

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Quizplus · Accepted Answer

Efficiency wages are set above the equilibrium wage to motivate workers to be more productive and reduce turnover.

An Efficiency Wage Is