A firm uses an efficiency wage scheme to deter workers from shirking, which is detected 10% of the times. Suppose a risk-neutral worker that has a reservation wage of $500. The efficiency wage paid by this firm is $7,000. What is the industry ongoing wage?
A) $1,000
B) $5,000
C) $1,500
D) $2,000
D
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A bank can safely lend an amount equal to its
A) excess reserves. B) required reserves. C) vault cash. D) total reserves.
Many economists believe that in our modern economy, firm size is most directly determined by
a. concentration ratios that decrease as the number of firms decreases b. diseconomies of scale that make it less costly to increase firm size c. easy entry of new firms when there are economies of scale d. government policies that dictate optimal firm investment levels e. modern technology that gives an advantage to large-scale production methods
The United States has greater income disparity than
a. Japan. b. India. c. South Africa. d. Both a and b are correct.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher