Which Theory Explains the Fact That Some Firms May Choose

question 431

Multiple Choice

Which theory explains the fact that some firms may choose to pay their employees more then they would earn as determined by equilibrium in the labor market?

• A)the theory of efficiency wages
• B)the marginal-productivity theory
• C)human-capital theory
• D)signaling theory

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Definitions:

Reaction

A process in which one or more substances are changed into one or more new substances through the reorganization of molecular or ionic structures.

Major Organic Product

The primary product of a chemical reaction, typically formed in the greatest amount compared to other products.

Methylpropane

Another term for isobutane, a branched alkane with the formula \(C_4H_{10}\), used as a refrigerant and a propellant in aerosol sprays.

Methyl Isobutyrate

An organic compound with the formula C5H10O2, used as a flavoring agent and solvent.