If Efficiency Wage Theory Is Valid,we Would Expect a Relatively

question 42

Multiple Choice

If efficiency wage theory is valid,we would expect a relatively low premium over the reservation wage when

• A)the unemployment rate is low.
• B)the job requires very little training.
• C)workers can be easily monitored.
• D)workers have few other options for employment in the area.
• E) all of the above

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Definitions:

Evenly Split

A division or distribution of something into equal or nearly equal parts.

Invisible Hand

The tendency of competition to cause individuals and firms to unintentionally but quite effectively promote the interests of society even when each individual or firm is only attempting to pursue its own interests.

Ultimatum Game

A game in experimental economics where a proposer offers how to split a sum of money with a responder, who can accept or reject the offer.

Dictator Game

A behavioral economics experiment that tests how individuals behave when they hold all the power over allocating resources.