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The Efficiency Wage Hypothesis States That Firms Can Increase Productivity

Question 2

Multiple Choice

The efficiency wage hypothesis states that firms can increase productivity and profits by:


A) paying wages that vary according to the reservation wages of workers.
B) paying higher wages.
C) paying lower wages.
D) paying wages that vary according to the marginal productivity of workers.
E) paying wages that vary according to the degree of risk aversion of workers.

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