The Minimum-Wage, Insider-Outsider, and the Efficiency-Wage Explanations All Seek to Explain

question 64

Multiple Choice

The minimum-wage, insider-outsider, and the efficiency-wage explanations all seek to explain

• A)the increase in the employment-to-population ratio over the past 40 years.
• B)the trend in real wages over the past 40 years.
• C)why the labor market is always in a state of flux.
• D)why the real wage is above the equilibrium real wage.
• E)why there is a persistent excess demand for labor.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Demand Curves

Visual diagrams that illustrate the connection between a product's price and the amount consumers are willing to buy.

MC = MR

An economic principle that firms reach the optimal level of production when marginal cost equals marginal revenue.

Downward-Sloping

Describes a curve or line on a graph that shows a decrease in a variable (e.g., price) leading to an increase in another variable (e.g., quantity demanded), typically observed in demand curves.