A. is paid by firms who can't directly monitor the work effort of their employees
Explanation:
The efficiency wage refers to a wage that is greater than the equilibrium wage which firms pay to employee voluntarily in order to bring about higher productivity and profits.
The efficiency wage is usually paid in order to avoid "shirking" (screwing around) when it is not possible for firms to directly monitor the work effort of their employees.
Screwing around implies wasting time by enganging in unproductive activity.
Therefore, the theory of effiiciency wage predicts that amployees are motivated to harder ans smarter when they are paid an efficiency wage when it is not possible for firms to directly monitor the work efforts of the employees.
