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Unformatted text preview: wage Figure A) would be below $10. B) would equal C) $10. would be above $10. D) could either be above or below $10. Answer: C Diff: 2 Topic: Explaining the Existence of Unemployment Skill: Analytic AACSB: Analytic Skills 21) Refer to Figure 14.3. If this firm pays the efficient wage of $11, A) the firm's B) demand for labor will increase until $11 is also the equilibrium wage. the supply of C) labor will decrease until $11 is also the equilibrium wage. there will be an excess supply of labor of 2,000. D) there will be an excess supply of labor of 3,000. Answer: D Diff: 3 Topic: Explaining the Existence of Unemployment Skill: Analytic AACSB: Analytic Skills 22) Efficiency wage theory suggests that firms may hold wages above the market clearing rate because A) they believe B) that the productivity of workers increases with the wage rate. unspoken C) agreements between workers and firms are inplace. it is required by law that they do so. D) long-term contracts fix wage rates for a period of one to three years. Answer: A Diff: 2 Topic: Explaining the Existence of Unemployment Skill: Conceptual AACSB: Reflective Thinking 23) Firms may NOT hold wages abo...
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