Firms with internal labor markets have more flexibility in deciding the level and time profile of wages because
A. individuals tend to base their employment decisions on their entire career earnings.
B. compensating wage differentials do not have to be paid in internal job markets.
C. they have to pay the wage rate that equals the marginal revenue product of labor.
D. firm-specific human capital is less costly than general human capital.
Answer: A
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Which statement about price elasticity of demand along a linear demand curve is true?
a. As the quantity demanded increases, so does the buyer's sensitivity to price. b. When price elasticity of demand is equal to 1, consumers are indifferent to subtle price changes. c. The ratio of current price to quantity demanded is a good estimate of the elasticity of demand. d. As the prices of goods increase, the elasticity of demand increases. e. When an individual buys 4 units of a good his/her elasticity of demand for each unit increases.
If a firm raises funds by recruiting additional owners to invest in the firm
A) the firm's financial capital would increase. B) the firm's financial capital would decrease. C) the firm's stock price would decrease. D) the firm's net worth would decrease.
Which of the following would not be an argument that government debt imposes a burden on future generations?
A. Lump-sum taxes in the future may be raised to pay higher real interest costs. B. Higher government deficits resulting from increased purchases may reduce savings, causing investment to fall. C. Higher taxes in the future to repay government debt will transfer resources from the poor to the rich. D. Higher taxes in the future could increase the average cost of distortions to the economy created by taxes.
An export subsidy raises the domestic price of the product.
Answer the following statement true (T) or false (F)