One Piece of Evidence in Favor of the Efficiency Wage

question 11

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)The existence of dual labor markets.
• 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:

MSE

Mean Squared Error, a measure of the average squared differences between the estimated values and the actual value, indicating the quality of an estimator.

SSE

Sum of Squares due to Error, a measure used in statistical analysis to quantify the discrepancy between the observed and predicted data values.

Factorial Design

An experimental design method used in statistics that allows the investigation of the effects of multiple factors by varying them together.

Replication

The process of repeating a study or experiment to confirm the findings of the original study.