A standard efficiency wage model pays workers higher wages in order to increase worker efficiency. As...
A standard efficiency wage model pays workers higher wages in order to increase worker efficiency. As a result, firm profits increase and there is a pool of involuntarily unemployed workers. This equilibrium comes about in part because
Multiple Choice
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workers are unaware of the pool of unemployed workers as long as they keep their job.
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the firm agrees to not replace labor with capital.
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the firm pays workers according to a tournament.
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workers will do anything to be paid a higher wage.
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workers are less likely to shirk when there is a pool of unemployed workers who are willing to take their job.
Homework Answers
Ans) the correct option is workers are less likely to shirk when there is a pool of unemployed workers who are willing to take their job.
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A standard efficiency wage model pays workers higher wages in
order to increase worker efficiency. As...
13. According to the theory of efficiency wages (x)anything that makes the efficiency wage rise relative...
13. According to the theory of efficiency wages (x)anything that makes the efficiency wage rise relative to the market-clearing wage will increase the quantity demanded of labor and reduce the quantity supplied of labor .(y)firms may choose to pay a wage above the equilibrium level to attract the best skilled workers, to provide an incentive to work hard and to reduce worker turnover. (z)anything that makes the efficiency wage rise relative to the market-clearing wage will cause a surplus of...
12. The theory of efficiency wages Why might some firms voluntarily pay workers a wage above...
12. The theory of efficiency wages Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labour? Check all that app Paying higher wages can reduce a firm's training costs. Paying higher wages increases worker turnover. Paying higher wages tends to reduce the average experience level of a firm's workers. Higher wages cause workers to shirk more of their responsibilities. Grade It Now Save & Continue Continue without saving
Ability bias can arise when estimating compensating wage differentials associated with various job characteristics. What is...
Ability bias can arise when estimating compensating wage differentials associated with various job characteristics. What is ability bias in this context? a. Low-skilled workers are likely to have low wages but good job amenities. O Ь.High-skilled workers are likely to have high wages but poor job amenities O c. High-skilled workers are likely to have lower wages than unskilled workers but to have better job amenities d.High-skilled workers are likely to have higher wages than unskilled workers, but they are...
4. Asymmetric information and labor markets Raphael is the manager of a factory. Workers at the...
4. Asymmetric information and labor markets Raphael is the manager of a factory. Workers at the factory are assigned to one of two tasks, one of which requires skilled labor and one of which requires unskilled labor. Because skilled workers earn a higher wage than unskilled workers, everyone who applies for a job says they're skilled. Raphael's challenge is to figure out who is actually a skilled worker and who is an unskilled worker. Suppose that Raphael would like to...
5. Asymmetric information and labor markets Megan is the manager of a factory. Workers at the...
5. Asymmetric information and labor markets Megan is the manager of a factory. Workers at the factory are assigned to one of two tasks, one of which requires skilled labor and one of which requires unskilled labor. Because skilled workers earn a higher wage than unskilled workers, everyone who applies for a job says they're skilled. Megan's challenge is to figure out who is actually a skilled worker and who is an unskilled worker. Suppose that Megan would like to...
Question 5: Consider a worker that ranks combinations of employee benefits (E) and wages (W) according...
Question 5: Consider a worker that ranks combinations of employee benefits (E) and wages (W) according to the utility function U = EW , where a and 8 are positive constants and U is the index of satisfaction. Suppose that firms are able to remain competitive (i.e., keep profits at zero) if they offer S90 in wages and no employee benefits. If they offer benefits, wages must be reduced by 75 cents for every dollar of benefits offered. Suppose that...
1. The reservation wage likely increases when A. the price of consumption increases. B. the wage...
1. The reservation wage likely increases when A. the price of consumption increases. B. the wage increases. C. the price level (of consumption and wages) increases. D. non-labor income increases. E. one is a discouraged worker. 2. Due to the added worker effect, the labor force participation rate A. increases during a recession. B. decreases during a recession. C. a fairly useless statistic. D. over-counts the number of workers wanting a job. E. over-counts the number of workers with a...
In order A,B,C, or D multiple choice questions. An increase in money supply will cause the...
In order A,B,C, or D multiple choice questions. An increase in money supply will cause the following in the Money Market decrease in interest rates and decrease in quantity of money decrease in interest rates and increase in quantity of money increase in interest rates and decrease in quantity of money increase in interest rates and increase in quantity of money QUESTION 29 Under this idea an increase in prices reduces real wages causing firms to increase production and employment...
News Analysis: Should the Minimum Wage Increase? Attempts: Do No Harm: /1 2. The connection between...
News Analysis: Should the Minimum Wage Increase? Attempts: Do No Harm: /1 2. The connection between macroeconomics and microeconomics While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part...
Some towns and cities have passed statutes requiring higher wages. This homework assignment examines the economic...
Some towns and cities have passed statutes requiring higher wages. This homework assignment examines the economic resuts of these statutes. Some argue that the new laws are aimed atlarge firms thatemploy manyworkers and earn largeprofits from each worker. Consider the scenario below, which reflects the more typical case. We do not judge the morality of these statutes or whether low paid workers are exploited by firms. Exploit is a normative tem imply ngthat firms un ary appropriate tewealth of therworkers.Landsburg...
12. The theory of efficiency wages Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labour? Check all that app Paying higher wages can reduce a firm's training costs. Paying higher wages increases worker turnover. Paying higher wages tends to reduce the average experience level of a firm's workers. Higher wages cause workers to shirk more of their responsibilities. Grade It Now Save & Continue Continue without saving
Ability bias can arise when estimating compensating wage differentials associated with various job characteristics. What is ability bias in this context? a. Low-skilled workers are likely to have low wages but good job amenities. O Ь.High-skilled workers are likely to have high wages but poor job amenities O c. High-skilled workers are likely to have lower wages than unskilled workers but to have better job amenities d.High-skilled workers are likely to have higher wages than unskilled workers, but they are...
4. Asymmetric information and labor markets Raphael is the manager of a factory. Workers at the factory are assigned to one of two tasks, one of which requires skilled labor and one of which requires unskilled labor. Because skilled workers earn a higher wage than unskilled workers, everyone who applies for a job says they're skilled. Raphael's challenge is to figure out who is actually a skilled worker and who is an unskilled worker. Suppose that Raphael would like to...
5. Asymmetric information and labor markets Megan is the manager of a factory. Workers at the factory are assigned to one of two tasks, one of which requires skilled labor and one of which requires unskilled labor. Because skilled workers earn a higher wage than unskilled workers, everyone who applies for a job says they're skilled. Megan's challenge is to figure out who is actually a skilled worker and who is an unskilled worker. Suppose that Megan would like to...
Question 5: Consider a worker that ranks combinations of employee benefits (E) and wages (W) according to the utility function U = EW , where a and 8 are positive constants and U is the index of satisfaction. Suppose that firms are able to remain competitive (i.e., keep profits at zero) if they offer S90 in wages and no employee benefits. If they offer benefits, wages must be reduced by 75 cents for every dollar of benefits offered. Suppose that...
News Analysis: Should the Minimum Wage Increase? Attempts: Do No Harm: /1 2. The connection between macroeconomics and microeconomics While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part...
Some towns and cities have passed statutes requiring higher wages. This homework assignment examines the economic resuts of these statutes. Some argue that the new laws are aimed atlarge firms thatemploy manyworkers and earn largeprofits from each worker. Consider the scenario below, which reflects the more typical case. We do not judge the morality of these statutes or whether low paid workers are exploited by firms. Exploit is a normative tem imply ngthat firms un ary appropriate tewealth of therworkers.Landsburg...
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