A Firm Might Choose to Pay Its Employees a Wage

Multiple Choice

A firm might choose to pay its employees a wage higher than that which would clear the market because

A) the higher wage raises the opportunity cost of shirking.
B) the higher wage may shift the labor demand curve to the left.
C) the firm will have higher turnover, allowing "new blood" to invigorate older workers, who have a greater tendency to shirk.
D) this policy reduces the proportion of experienced to inexperienced workers, resulting in a lower overall wage bill.