Fred decides to hire some additional mechanics to work in his expanded automotive business.The going wage is $16 per hour.Efficiency-wage theory suggests that Fred should offer:

Question

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Efficiency-wage theory suggests that offering higher wages than the going wage can attract a better pool of applicants, who are generally more productive and committed to their job since they are being paid more than what the market typically offers. This can result in reduced turnover, lower training costs, and improved quality of work. Therefore, offering more than $16 per hour can help Fred attract a better pool of applicants for his expanded automotive business.

Fred Decides to Hire Some Additional Mechanics to Work in His