Answer the following statement true (T) or false (F)
1) The principal-agent problem in labor markets arises because of the possibility of shirking by workers.
2) Efficiency wages are established at below-equilibrium levels.
3) Human capital investment refers to spending on education and worker training.
4) Noncompeting groups of workers are the result of geographic immobilities.
5) Shirking refers to the behavior of workers who provide less-than-expected effort on the job.
1) T
2) F
3) T
4) F
5)T
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A) not change; not change B) decrease; increase C) increase; not change D) not change; increase
Price increases always reduce economic efficiency
a. True b. False Indicate whether the statement is true or false