Suppose That Workers in the Food Service Industry Go on Strike

question 22

Multiple Choice

Suppose that workers in the food service industry go on strike during an economic downturn because they are unwilling to accept a cut in their wages unless they know that workers in other industries are receiving similar wage cuts. This example is consistent with the

• A) efficiency wage explanation of unemployment.
• B) explicit contract explanation of unemployment.
• C) social contract explanation of unemployment.
• D) relative-wage explanation of unemployment.