Suppose that Mike wants to pay efficiency wages to help in the construction of his beach home.If the prevailing wage rate for electricians is $22 per hour in his area,one possible efficiency wage he could pay would be:
A)$22.
B)$26.
C)$18.
D)the minimum wage.

Question

Quizplus · Accepted Answer

Efficiency wages are wages paid that exceed the market wage rate in order to increase worker productivity and decrease turnover. Therefore, Mike should pay a wage higher than the prevailing wage rate for electricians in his area. $26 would be a reasonable efficiency wage to pay, as it is a significant increase from the market wage rate of $22 per hour.

Suppose That Mike Wants to Pay Efficiency Wages to Help