The Efficiency Wage Is

question 56

Multiple Choice

The efficiency wage is:

• A) a wage at which there is no unemployment, and shirking workers are not counted in the pool of total labor.
• B) a wage at which there is a positive amount of unemployment. Individuals who are fired for shirking will be penalized with a period of unemployment.
• C) a wage at which there is a shortage of labor. Firms who fire a worker for shirking will be able to hire another one easily.
• D) the wage that is paid to high-quality, non-shirking workers. Other workers are paid the market-clearing wage.
• E) the wage that subtracts the cost of shirking from the market-clearing wage to determine that which is really paid.

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Definitions:

Ordinary Simple Interest

Interest calculated only on the principal amount, not on the interest that accrues over time.

360-Day Year

An artificial accounting period used in finance that simplifies the calculation of interest by assuming each month has 30 days, resulting in a calendar year of 360 days.

Ordinary Simple Interest

Interest calculated on the principal amount of a loan or investment without compounding, based on a 365-day year.

360-Day Year

A simplified accounting method where the year is considered to have 360 days for the calculation of interest and other financial metrics.