According to the efficiency wage model, firms will pay the real wage that
A) maximizes workers' marginal productivity.
B) maximizes the marginal productivity of capital and the marginal productivity of labor together.
C) maximizes effort per dollar of real wage.
D) minimizes hiring and training costs to the firm.
C
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Which of the following would be classified as a government purchase?
a. Social security payments b. Government purchases of computers c. Unemployment insurance payments d. Welfare payments e. Veterans' Administration payments.
Industries, where economies of scale dictate that only a few firms produce, will be efficient if the markets in which they sell are
A. perfect. B. contestable. C. close to each other. D. protected from entry.
Suppose a shift of the labor-demand curve results in an increase of $5 in the equilibrium wage. How does this shift affect the value of the marginal product of labor?
If positive economic profit exists in monopolistic competition, there is:
A) incentive for new firms to enter. B) a motive for existing firms to increase prices. C) proof that advertising works. D) a motive for existing firms to decrease prices. E) product differentiation.