According to the efficiency wage theory, an efficiency wage reduces shirking

+1 vote
    because the efficiency wage is lower than the competitive wage and so employees must work harder and longer to make up the lost earnings.
     because a higher efficiency wage increases unemployment, and so shirking employees who lose their jobs know they may face a period of extended unemployment.
     because it raises the opportunity cost of not working for the employee.
     None of the above.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

0 votes
because a higher efficiency wage increases unemployment, and so shirking employees who lose their jobs know they may face a period of extended unemployment.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)



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