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:

Crystallized Intelligence

The capability of applying knowledge and experiences that one has learned over time.

Triarchic Intelligence

A theory by Robert Sternberg that intelligence consists of analytical, creative, and practical aspects.

Fluid Intelligence

The ability to solve new problems, use logic in new situations, and identify patterns without relying on previously acquired knowledge.

Motor Intelligence

The ability or skill in performing tasks with physical coordination and movement.