Employers often pay a higher wage:
A)when it is easy to verify worker qualifications.
B)in a lower-skilled labor market.
C)when it is hard to monitor worker productivity.
D)in a labor market with excess workers.

Question

Quizplus · Accepted Answer

Employers pay a higher wage when it is hard to monitor worker productivity because if monitoring is difficult, workers may not work as hard, so a higher wage can serve as an incentive to increase effort. Alternatively, if monitoring is easy, employers can pay lower wages because they can more easily detect shirking or low effort.

Employers Often Pay a Higher Wage