In any efficiency wage model, it must be true that
a. the marginal benefit of increased efficiency is equal to the marginal cost of higher wages.
b. nominal wages are inflexible.
c. disequilibrium in the labor market exists.
d. all of the above.
e. none of the above.
D
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Refer to Table 2.4. What can be observed about the given resources?
A) Land is fixed but fertilizer is variable. B) Land and fertilizer are both fixed. C) Land is variable but fertilizer is fixed. D) Land and fertilizer are both variable.
You have the choice of going on vacation to Florida for one week, staying at work for the week, or spending the week doing fix-up projects around your house. If you decide to go to Florida, the opportunity cost of the trip is
A) working and doing fix-up projects. B) working or doing fix-up projects, depending on which you would have done otherwise. C) working, because you would be giving up income. D) nothing because you will enjoy the trip to Florida.