If firms are paying efficiency wages, they:
A. may be reluctant to increase nominal wages when aggregate demand increases.
B. are highly vulnerable to import competition.
C. may be targeted for takeover by firms paying market wages.
D. may be reluctant to cut wages when aggregate demand declines.
D. may be reluctant to cut wages when aggregate demand declines.
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Based on opportunity cost, where would one expect to have the most difficulty finding a teenager to baby-sit?
A) A high-income area with lots of teenagers B) A low-income area with lots of teenagers C) A middle-income area with lots of teenagers D) Any income area because teenagers no longer like babysitting
A monopoly creates a deadweight loss because the monopoly produces less than the efficient quantity
Indicate whether the statement is true or false
Suppose that a worker has the option of being paid in euros or dollars. It would be to the workers advantage if his employer pays him in ____________ rather than ______________ if the worker believes that the value of the dollar is about to ____________ relative to the value of the euro
A) euros; dollars; fall B) dollars; euros; rise C) euros; dollars; rise D) dollars; euros; fall E) ?a and b
A necessary condition for the economy to be self-regulating is that
A) wages must be relatively high. B) the labor market must always be in equilibrium. C) the interest rate must be above its equilibrium level. D) wages must be flexible in both an upward and downward direction. E) none of the above