One Piece of Evidence in Favor of the Efficiency Wage

question 29

Multiple Choice

One piece of evidence in favor of the efficiency wage model is that some sectors of the economy pay relatively high wages, whereas other sectors pay lower wages. This supports the efficiency wage model as it seems to provide evidence of what?

• A) Dual labor markets exist.
• B) There are compensating differentials being paid depending on the type of work being done.
• C) Unemployment is constant across sectors.
• D) High-wage firms take advantage of delayed-compensation contracts.
• E) Workers voluntarily provide bonds in case they are caught shirking.

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Definitions:

Social Identities

The part of an individual's self-concept derived from their perceived membership in social groups.

Outgroup Homogeneity

The perception that members of an out-group are more similar to each other than they actually are, especially when compared to the perceived diversity within an in-group.

Gender

Variations in traits that distinguish between male and female qualities.

Unpredictable

Not able to be predicted or foreseen, indicating randomness or lack of a discernible pattern in behavior or events.