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

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