Fred Decides to Hire Some Additional Mechanics to Work in His

question 44

Multiple Choice

Fred decides to hire some additional mechanics to work in his expanded automotive business.The going wage is $16 per hour.Efficiency-wage theory suggests that Fred should offer:

• A)very little as the automotive industry is a sunset industry
• B)the minimum wage which is $14 per hour, since some mechanics would be willing to work at that level
• C)more than $16 per hour, so as to attract a better pool of applicants
• D)enough to attract the number of applicants necessary to fill the jobs available

---

Definitions:

Exergonic Reaction

A reaction characterized by a release of free energy. Also called spontaneous reaction. Compare with endergonic reaction.

Free Energy

The amount of internal energy within a system that is available to perform work, as in chemical reactions and physical processes.

Absorbs

The process of taking in or soaking up energy or material from the environment, such as light, heat, or moisture, through physical or chemical means.

Free Energy

A thermodynamic quantity representing the amount of energy in a system that is available to do work at a constant temperature and pressure.