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.Management Sciences
Category: Labour Market
Which of the following statements about efficiency wage theory is true ?
A. Paying above the competitive equilibrium wage tends to cause workers to shirk their responsibilities
B. Firms do not have a choice about whether they pay efficiency wages or not because these wages are determined by law
C. Paying the lowest possible wage is always the most efficient (Profitable)
D. Paying above the competitive equilibrium wage may improve worker health lower worker turnover improve worker quality and increase worker effort
Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium ?
A. Unemployment due to unions
B. Unemployment due to efficiency wages
C. Frictional Unemployment
D. Unemployment due to minimum-wage laws
Demand for labour is more likely to be wage inelastic if ?
A. Wages are a small proportion of total costs
B. Demand for the final product is price elastic
C. It is easy to replace labour
D. Capital is a good substitute for labour
A profit maximising firm will employ labour up to the point where ?
A. Marginal revenue = marginal product
B. Marginal cost = marginal product
C. Marginal revenue product = average cost of labour
D. Marginal revenue product = marginal cost of labour
The natural rate of unemployment is likely to fall if ?
A. unemployment benefits increase
B. Income tax increases
C. More training is available for the unemployed
D. Geographical immobility increases
A fall in demand for labour is likely to lead to ?
A. A lower equilibrium wage and lower quantity of labour
B. A lower equilibrium wage and higher quantity of labour
C. A higher equilibrium wage and higher quantity of labour
D. A higher equilibrium wage and lower quantity of labour
Unions tend to increase the disparity in pay between insiders and outsiders by ?
A. increasing the wage in the Unionized sector, Which may create a decrease in the supply of workers in the non-unionized sector
B. Increasing the demand for workers in the Unionized sector
C. decreasing the demand for workers in the Unionized sector
D. Increasing the wage in the Unionized sector which may create an increase in the supply of workers in the non-unionized sector
Refer to Figure 1. The unemployment rate is ?
A. 3.2 Percent
B. 5.7 Percent
C. 5.8 Percent
D. Not Enough
Union might increase efficiency in the case Where they ?
A. Raise the wage for insiders above the competitive equilibrium
B. Lower the wage of local outsiders
C. Offset the market power of a large firm that is the dominant employer in a region
D. Threaten a strike but don’t actually follow through so there are not lost hours of work
Sector shifts tend to raise which type of unemployment ?
A. Structural Unemployment
B. Unemployment due to efficiency wages
C. Unemployment due to unions
D. Frictional Unemployment
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