Assuming No Change in the Effort Curve of Employees,the Efficiency

question 57

Multiple Choice

Assuming no change in the effort curve of employees,the efficiency wage model implies that

• A)the real wage is rigid and equals the efficiency wage.
• B)the real wage exceeds the marginal productivity of labor.
• C)an increase in the marginal productivity of capital will increase the real wage.
• D)the real wage is procyclical.

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Definitions:

Perfectly Elastic Demand

The case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line.

Demand Curves

Graphical representations showing the quantity of a particular good that consumers are willing to buy at different price levels, assuming other factors remain constant.

Total Revenue

The total amount of money a company receives from selling its goods or services, calculated as the quantity sold multiplied by the sale price.

Perfectly Price-inelastic

A situation where the quantity demanded or supplied of a good does not change in response to a price change.