Efficiency wages paid to workers:
A) equal the lowest pay that workers would accept.
B) are wages above the lowest pay that workers would accept.
C) equal the marginal revenue product of the workers.
D) are wages adjusted for changes in the price level.
B
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An example of the commodity substitution bias in the calculation of the CPI is a price increase in
A) turkey when the price of chicken doesn't rise. B) a GPS unit versus a AAA map book. C) a 2014 Toyota Camry versus a 2005 Honda Civic. D) etexts versus used books bought through Craigslist. E) new homes because people's incomes have increased.
Comment on the following statement: "When firms are earning positive profits, the industry supply curve will shift to the right."
What will be an ideal response?
A trader that is long in the futures market has purchased a futures contract
a. true b. false
Refer to Scenario 9.3 below to answer the question(s) that follow. SCENARIO 9.3: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $5 on average per meal. Refer to Scenario 9.3. Total cost per week is
A. $1,000. B. $1,600. C. $2,000. D. $3,600.