In the efficiency wage theory, unemployment is caused by
a. firms paying higher than the equilibrium wage to increase workers’ productivity.
b. firms paying less than the equilibrium wage to increase their profit.
c. firms paying the equilibrium wage.
d. workers insisting on being paid more than the equilibrium wage.
a. firms paying higher than the equilibrium wage to increase workers’ productivity.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
A horizontal merger
A) results in a trust (for example, the Standard Oil Company). B) is a merger between firms in the same industry. C) is a merger between firms at different stages of production of a good. D) was illegal in the United States until the Federal Trade Commission Act was passed by Congress in 1914.
During an election year, the federal government would mostly likely increase _____
a. tax rates b. interest rates c. the discount rate charged to commercial banks d. the minimum reserve requirement of commercial banks e. government purchases of goods and services
Which of the following statements contradicts an upward-sloping market-supply curve?`
a. All people have backward-bending individual supply curves. b. Leisure is more enjoyable than work. c. The elasticity of labor supply is larger than the elasticity of labor demand. d. To work more means to enjoy less leisure. e. The opportunity cost of leisure decreases with an increase in wage rate.