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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
Which of the following reasons explains why companies might choose to pay efficiency wages?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
Each of these factors—lack of concern about job loss, frequent quitting for better jobs, low-quality applicants, and poor nutrition leading to fatigue—illustrates why firms may opt to pay efficiency wages to improve worker performance and retention. Therefore, all the listed reasons contribute to the rationale behind efficiency wage payments.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following government actions is least likely to decrease the unemployment rate?
- 4.What happens if the wage rate is set above the competitive equilibrium wage for any reason?
- 5.What is the typical effect of a minimum wage law on employment levels?