Three employers have justified their actions as follows. Whose logic is not consistent with the logic of efficiency wage theory?
a. Instead of spending money on an electronic timing system that monitors worker hours, Tom spends an equivalent amount of money on higher wages.
b. Dick pays his workers less than the equilibrium wage so that they will not have the time or money to look for work somewhere else.
c. Harry pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive.
d. None of the above is consistent with the logic of efficiency wage theory.
b
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It is customary to express changes in the exchange rates of two currencies over time, as:
a. the loss of purchasing power of one currency divided by the loss of purchasing power of the other currency. b. the percentage change expressed as an appreciation or depreciation of one against the other. c. a ratio of the absolute values (without signs). d. a ratio of the price of gold in each nation.
The linear probability model contains heteroskedasticity unless _____.
A. the intercept parameter is zero B. all the slope parameters are positive C. all the slope parameters are zero D. the independent variables are binary
Explain the output and factor substitution effects of an increase in the price of capital on theDemand for labor by a firm that produces output using both capital and labor
What will be an ideal response?
Consider the following: an investor in the U.S. is pondering a one-year investment. She can purchase a domestic bond for $1,000 that has an interest rate of i or she can purchase a bond in England for 1,500 British pounds (£) that pays an interest rate of if. The current exchange rate is $1.50/£ . She considers the bonds to be of equal risk. If i = if, the expected returns are not equal. What do you know?
A. The exchange rate must be flexible B. Arbitrage doesn't work C. The bonds initially sold for different prices D. The exchange rate is fixed between the U.S. and Britain