Paying efficiency wages helps firms reduce the problem of adverse selection by:
A)generating additional profits that can be used to pay for more proficient hiring managers.
B)keeping labour unions from organizing workers in the firm.
C)encouraging unsupervised workers to maintain a high level of productivity.
D)providing an incentive for the best-qualified workers to remain with the firm.

Question

Quizplus · Accepted Answer

Paying efficiency wages attracts and retains the best-qualified workers, reducing the risk of hiring less capable employees, which addresses adverse selection.

Paying Efficiency Wages Helps Firms Reduce the Problem of Adverse