Quinn,the CEO of a corporation operating in a relatively poor country where wages are low,decides to raise the wages of her workers even though she faces an excess supply of labor.Her decision

Question

Quizplus · Accepted Answer

By raising the wages of her workers and providing them with a nutritious diet, Quinn can potentially increase their productivity and thus increase profits. This is known as the efficiency wage theory. However, B and C are not necessarily true as raising wages may not necessarily eliminate excess supply of labor and may not lead to an increase in shirking.

Quinn,the CEO of a Corporation Operating in a Relatively Poor