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As an Employer, I Want Productive Employees Who Will Stay

Question 40

Multiple Choice

As an employer, I want productive employees who will stay with the firm for an extended period of time, so I should pay:


A) less because human capital theory suggests better-paid employees work harder and stay longer.
B) less because of the existence of compensating differentials.
C) more because human capital theory suggests better-paid employees work harder and stay longer.
D) more because of the existence of compensating differentials.
E) more because efficiency wage theory suggests that the employer will be able to secure more productive employees.

Correct Answer:

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