Assuming no change in the effort curve of employees, the efficiency wage model implies that
A. an increase in the marginal productivity of capital will increase the real wage.
B. the real wage exceeds the marginal productivity of labor.
C. the real wage is procyclical.
D. the real wage is rigid and equals the efficiency wage.
Answer: D
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A person 16 years or older who does not work, but is actively looking for work, is officially classified as:
A. unemployed. B. employed. C. chronically unemployed. D. out of the labor force.
Economic mobility refers to the
a. government's attempt to distribute monetary assistance to areas most in need. b. ability of families to freely relocate to find good jobs. c. movement of people among income classes. d. movement of resources from one country to another.
All points inside the production possibilities curve indicate
A. the law of increasing relative cost. B. inefficiency in production. C. a lack of sufficient supply. D. the law of decreasing relative cost.
When nations attempt to move quickly from central planning to a market system, they face the obstacle of high transaction costs in large part because
A) market systems are unnatural and require careful design. B) people who have lived under socialism lack the basic skills a market system requires. C) people who have long lived under socialism are not sufficiently individualistic. D) the experience of socialism makes people distrustful of one another. E) they lack many of the institutions that develop over time in a market system.