Answer the following statements true (T) or false (F)
1. Commissions or royalties may be an inexpensive way of reducing shirking on a job when the costs of monitoring work performance are high.
2. Firms that pay efficiency wages tend to have higher worker turnover.
3. The marginal productivity theory of resource demand suggests that those resources whose productivity levels are high will end up getting a higher share of the economy's income.
4. Income from inherited wealth and property resources provides strong support for the marginal productivity theory of income distribution.
1. TRUE
2. FALSE
3. TRUE
4. FALSE
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Moral hazard and adverse selection are the result of
A) poorly functioning markets. B) government intervention. C) private information. D) treachery.
A visual expression of income distribution is depicted by
a. the Gini coefficient b. the IRS curve for incomes held by households c. supply and demand curves for the four resources: labor, capital, land, and entrepreneurship d. the Lorenz curve e. the diagonal on a Gini distribution