The theory of efficiency wages suggests that
a. above-equilibrium wages increase worker productivity.
b. workers with higher levels of education earn more than workers with lower levels of education.
c. workers signal their high ability to potential employers by completing formal years of schooling.
d. union workers earn more than nonunion workers.
a
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Because wage rates are so low in Africa, why don't Microsoft, Cisco and other major corporations close down their American operations and move to Africa?
What will be an ideal response?
An effective price ceiling usually generates
A) fire sales as firms try to unload their excess inventories. B) higher nominal prices. C) the use of nonprice rationing devices. D) happy sellers and dissatisfied buyers.
The marginal benefit of pollution abatement
A) increases at an increasing rate as abatement increases. B) decreases as pollution abatement increases because of the law of diminishing marginal utility. C) increases as pollution abatement increases because of the law of increasing marginal returns. D) is constant as pollution abatement increases.
Suppose a firm wants to build a new factory that would add pollution to an already polluted area. Under an offset program, the firm must:
a. install scrubbers and other government-mandated equipment. b. purchase pollution permits from the government. c. reduce or eliminate an old pollution source in the area. d. pay a tax which depends on the amount of pollution created.