Question

The theory of efficiency wages Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor? Check all that apply. Paying higher wages enhances workers to adopt healthier lifestyles, enhancing their productivity. Paying higher wages can reduce a firm's training costs. Paying higher wages tends to reduce the average experience level of a firm's workers. Higher wages cause workers to shirk more of their responsibilities.

Answer 1

Answer:

The theory of efficiency wages why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor  is due to these reasons:

Paying higher wages enhances workers to adopt healthier lifestyles, enhancing their productivity.

Paying higher wages can reduce a firm's training costs.

Paying higher wages encourages workers to be more productive.

Explanation:

Payment of higher wages increases the efficiency and productivity of the workers.

Also, payment of higher wages gives room for self-motivation among workers. Therefore, much training is not required leading to a reduction in training cost.