A firm that fills its vacancies in the upper levels of the hierarchy with its own employees:
a. avoids opportunistic behavior by employees.
b. uses an internal labor market.
c. avoids the difficult tasks of measuring and comparing the productivities of individual workers.
d. pays them according to their performance rather than seniority.
B
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In the two-period model, the budget constraint is kinked for all of these reasons, except
A) the real interest rate is greater than zero. B) there are costs to banks from lending and borrowing. C) there is asymmetric information in the credit market. D) there is limited commitment in the credit market.
Which of the following is FALSE about firms organized along functional lines?
a. Workers develop functional expertise b. Workers can easily share information within their division c. They foster the exploitation of economies of scale d. None of the above
Structural unemployment is often thought to explain relatively short spells of unemployment
a. True b. False Indicate whether the statement is true or false
___________ prices are set by large corporations for relatively long periods of time.
Fill in the blank(s) with the appropriate word(s).