Efficiency wage theory suggests that firms may hold wages above the market clearing rate because
A. unspoken agreements between workers and firms are in place.
B. they believe that the productivity of workers increases with the wage rate.
C. long-term contracts fix wage rates for a period of one to three years.
D. it is required by law that they do so.
Answer: B
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The worker-misperception explanation of the SRAS curve is used to explain why
A) SRAS curves shift to the right B) SRAS curves shift to the left C) the AD curve cannot change the price level if the SRAS curve is operational. D) the SRAS curve slopes downward. E) none of the above
Competition in markets results in:
A.) Economic losses in the long run. B.) Guaranteed economic profit. C.) The optimal mix of goods and services being produced. D.) An undesirable allocation of resources.
How does an increase in taxes affect the expenditure schedule?
A. It causes movement to the left along the schedule. B. It causes the schedule to shift upward. C. It causes movement to the right along the schedule. D. It causes the schedule to shift downward.
If elasticity of demand is 1.0 and price is lowered from $100 to $99, by what percentage will quantity demanded rise?
What will be an ideal response?