Author Question: Why do workers exert more effort when they are paid higher salaries? What will be an ideal ... (Read 131 times)

nmorano1 · **on:** Jun 29, 2018

Why do workers exert more effort when they are paid higher salaries?

What will be an ideal response?

Question 2

A perfectly elastic demand curve:

A) is parallel to the price axis.
B) is parallel to the quantity axis.
C) slopes upward.
D) slopes downward.

cclemon1 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The higher the wage rate, the more effort an individual worker exerts. There are several potential reasons for this relationship . First, higher-paid workers might wish to work harder because a higher-paying job is more valuable to them, and the risk of not succeeding in this joband thus having to quit or be firedbecomes potentially more costly. Second, higher wages might encourage workers to stay longer in the company, reducing turnover. The resulting longer employment relationships may increase worker experience and productivity, and may also directly increase profits by reducing turnover costs. Third, higher pay might motivate the worker psychologically. For example, workers who perceive generosity from their employers may perceive this as a gift and reciprocate by working harder.

Answer to Question 2

B