2. The theory of efficiency wages explains why:A. setting wages at the equilibrium level may increase unemployment.B. the most efficient way to pay workers is to pay them according to their skills.C. if worker productivity is tied to their wage rate, then it is in the best interest of firms to offer wages that are above theequilibrium wage rate.D. it is efficient for firms to set wages at the equilibrium wage rate.5. The labor demand curve isbecause as the real wage rate increasesA. downward-sloping; profit maximizing firms will want to employ more laborB. upward-sloping; profit maximizing firms will want to employ more laborC. upward-sloping; profit maximizing firms will want to employ less laborD. downward-sloping; profit maximizing firms will want to employ less labor7. When large numbers of unemployed workers leave the labor force, the labor force will decline at aunemployment, causing the unemployment rate torate than totalA. faster; riseB. slower; fallC. slower; riseD. faster; fall10. What will happen to aggregate demand if there is an unexpected rise in the value of stocks, raising household wealth?A. Households will save less and consume more at every given price level, implying that aggregate demand will shift tothe right.B. Households will save more and consume less at every given price level, implying that aggregate demand will shift tothe left.C. NothingD. Households will save less and consume more at every given price level, implying that aggregate demand will shift tothe left.

Wage refers to money that a employer pays to its employee in exchange of their labor services. These…

2. The theory of efficiency wages explains why: A. setting wages at the equilibrium level may increase unemployment. B. the most efficient way to pay workers is to pay them according to their skills. C. if worker productivity is tied to their wage rate, then it is in the best interest of firms to offer wages that are above the equilibrium wage rate. D. it is efficient for firms to set wages at the equilibrium wage rate.

2. The theory of efficiency wages explains why: A. setting wages at the equilibrium level may increase unemployment. B. the most efficient way to pay workers is to pay them according to their skills. C. if worker productivity is tied to their wage rate, then it is in the best interest of firms to offer wages that are above the equilibrium wage rate. D. it is efficient for firms to set wages at the equilibrium wage rate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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