Mary Sue is the newly appointed CEO of a company that manufactures USB flash drives on an assembly line.Her staff has told her that the output the firm produces,given the number of workers employed,indicates that some workers may be shirking.According to efficiency wage theory,what should she do?

Question

Quizplus · Accepted Answer

Efficiency wage theory states that paying workers more than the equilibrium wage rate can motivate them to work harder and reduce shirking. Therefore, Mary Sue should pay all workers more than the equilibrium wage rate to incentivize them to work harder and increase the firm's production output. Option B is not a viable solution as it would only increase the likelihood of shirking, while option C would not provide any motivation for workers to put in extra effort. Option D is also not a feasible solution as it would reduce the company's output and profits.

Mary Sue Is the Newly Appointed CEO of a Company