Dan decides to hire some additional workers for his golf cart factory.The equilibrium wage is $15 per hour.What does efficiency wage theory suggest is a reasonable wage for Dan to offer?
A) $15 per hour
B) less than $15 per hour,since some people would be willing to work for less
C) enough to attract the number of applicants necessary to fill the jobs available
D) more than $15 per hour,so as to attract a better pool of applicants

Question

Quizplus · Accepted Answer

According to efficiency wage theory, employers should pay higher than the equilibrium wage in order to attract a better pool of applicants who will be more productive and have lower turnover rates. Therefore, Dan should offer a wage higher than $15 per hour.

Dan Decides to Hire Some Additional Workers for His Golf