Employers May Choose to Pay Efficiency Wages That Are Higher

Multiple Choice

Employers may choose to pay efficiency wages that are higher than the equilibrium wage because

A) workers will be more willing to accept monitoring by their employers.
B) the threat of unemployment will help prevent workers from shirking.
C) the higher compensation will encourage workers to take more risks.
D) higher wages will attract only the most qualified workers and thus help solve the employer's adverse selection problem 2.