Which Is Not a Property of an Optimal Efficiency Wage

question 10

Multiple Choice

Which is not a property of an optimal efficiency wage?

• A) There is involuntary unemployment.
• B) The efficiency wage is higher than the competitive wage.
• C) Employed workers will not shirk on the job.
• D) Any structural unemployment that results from an efficiency wage is efficient for the economy as it helps sort nonshirkers and shirkers into good and bad jobs, respectively.
• E) Employment will be less with an efficiency wage than with a competitive wage.

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Definitions:

C Corporation

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.

Return

A document containing details about an individual's or entity's income, deductions, and tax liabilities filed with the tax authorities.

Basis

The initial value of an asset for tax purposes, used to calculate depreciation, amortization, and determines the gain or loss on the asset's sale.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's assets and earnings.