Define efficiency wages
Efficiency wages are above-equilibrium wages paid by firms to increase worker productivity.
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Making choices on the margin means
A) scribbling on the edges of your notebook paper. B) comparing all relevant alternatives systematically and incrementally. C) making a decision based on emotions. D) making decisions in the largest possible increments. E) taking account of all marginal benefits, all opportunity costs, and all sunk costs.
A firm operates and produces pollution that only harms an individual, Bob. The firm and Bob both know the costs and benefits of reducing pollution
Neither the firm nor Bob acts strategically while bargaining, and there are no transaction costs associated with bargaining. Explain how the efficient level of pollution occurs no matter whether the firm or Bob owns the property right to pollution.
How do the concepts of market failure and failure of market outcome relate to the concept of economic efficiency?
A. Market failure means the economy is not economically efficient; failure of market outcome could happen even if the economy is economically efficient. B. Both market failure and failure of market outcome could happen even if the economy is economically efficient. C. Failure of market outcome means the economy is not economically efficient; market failure could happen even if the economy is economically efficient. D. Both market failure and failure of market outcome mean that the economy is not economically efficient.
A perfectly competitive firm will be operating at its shutdown point if it operates
A. where P = MC. B. at the minimum point on its average variable cost curve. C. at the minimum point on its marginal cost curve. D. at the minimum point on its average total cost curve.