The efficiency wage theory

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    explains that the wage rate does not affect worker productivity and only causes unemployment and shirking by employees.
     states that when all workers are paid the same wage the market is competitive and so workers perform well in response to the competition.
     explains that labor productivity is affected by the wage rate and unemployment can be explained by firms paying a higher efficiency wage to discourage shirking by employees.
     explains that labor productivity is not affected by the wage rate and firms paying a higher efficiency wage will find themselves at a competitive disadvantage.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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explains that labor productivity is affected by the wage rate and unemployment can be explained by firms paying a higher efficiency wage to discourage shirking by employees.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)



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