Question

Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor? Check all that apply. Higher wages attract a more competent pool of workers. Paying higher wages encourages workers to be more productive. Paying higher wages increases worker turnover. Paying higher wages can reduce a firm's training costs.

Answer 1

Answer:

Paying higher wages boost up employees to be more productive, as higher wages is considered as a source of motivation to the employees and they will improve their level of work and complete their task in an effective and efficient manner which leads to productivity at workplace. Hence, this automatically leads to timely completion of work at almost zero cost.

The reasons why some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor are as follows:

• Paying higher wages helps workers to be healthier in some developing countries.
• Higher wages attract a more competent pool of workers.
• Paying higher wages encourages workers to be more productive.