A reservation wage is the ?

A. Maximum wage the firm is willing to pay
B. tip necessary to get a waiter to reserve a table
C. minimum wage the worker is willing to accept
D. competitive equilibrium wage.

An increase in the wage rate ?

A. Will usually lead to more people employed
B. Will decrease total earning if the demand for labour is wage elastic
C. is illegal in a free market
D. will cause a shift in the demand for labour

If, for any reason the wage is held above the competitive equilibrium wage?

A. The quantity of labour supplied will exceed the quantity of labour demanded and there will be Unemployment
B. Unions will likely Strike and the wage will fall to equilibrium
C. The quantity of labour demanded will exceed the quantity of labour supplied and there will be a labour shortage
D. The quality of workers in the applicant pool will tend to fall

Reducing involuntary unemployment ?

A. Helps the economy move on the to Production Possibility Frontier
B. Helps shift the economy’s Production Possibility Frontier outwards
C. Helps the economy move along its Production Possibility Frontier
D. Helps the economy move inside the Production Possibility Frontier

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

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