A Standard Efficiency Wage Model Pays Workers Higher Wages in Order

question 16

Multiple Choice

A standard efficiency wage model pays workers higher wages in order to increase worker efficiency. As a result, firm profits increase and there is a pool of involuntarily unemployed workers. In this model, if the firm's cost of monitoring effort falls,

• A)the efficiency wage will fall.
• B)the number of shirking workers will fall.
• C)firm profits will fall.
• D)the firm will increase its number of factory managers.
• E)the pool of involuntarily unemployed workers will increase.

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Definitions:

Degrees of Freedom

The count of distinct values or quantities that can be allocated to a statistical distribution.

Sample Size

The number of observations or data points that constitute a sample from a population.

Test Statistic

A value calculated from sample data during a hypothesis test used to decide whether to reject the null hypothesis.