Asked by Heather Jenkins on May 28, 2024
Verified
Efficiency wages are established at below-equilibrium levels.
Efficiency Wages
Wages that are deliberately set above the market equilibrium level by employers to increase productivity and efficiency among employees.
Below-equilibrium
A situation where the quantity demanded exceeds the quantity supplied at a given price.
- Understand the rationale behind, and the impact of, efficiency wages and piece-rate pay systems.
Verified Answer
AA
Ayesha ArakhanMay 31, 2024
Final Answer :
False
Explanation :
Efficiency wages are established at above-equilibrium levels, as they are meant to discourage turnover and incentivize workers to be more productive.
Learning Objectives
- Understand the rationale behind, and the impact of, efficiency wages and piece-rate pay systems.