An efficiency wage
a. gives an employee an incentive to shirk his duties.
b. is lower than the equilibrium wage for that position and region.
c. is higher than the equilibrium wage for that position and region.
d. both a and b are correct.
c
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When a minimum wage is ________, the firms' surplus and workers' surplus shrink, a deadweight loss ________, and resources are lost in job search
A) inefficient; arises B) inefficient; disappears C) efficient; arises D) efficient; disappears E) nonexistent; arises
In the long run, if firms in a perfectly competitive market are incurring economic losses, then
A) new firms will enter the market and the price will rise. B) some firms will leave the market and the price will fall. C) some firms will leave the market and the price will rise. D) new firms will enter the market and the price will fall.
All of the following represent differences between stocks and bonds except
A) the future growth of a stock is more uncertain than the payments of a bond. B) differences of opinion about a stock's future may vary considerably but there is less difference about a bond's future. C) bonds represent partial ownership in a firm but stocks do not. D) a stock can possibly pay dividends forever, but bonds have a fixed number of payments.
A substantial decrease in marginal tax rates will encourage individuals to
a. increase their earnings and work effort. b. save a smaller portion of their income. c. take more time off for vacations. d. spend more on tax-deductible items.