The bonding critique criticizes the model of efficiency wages because
A) profit-maximizing firms should never be willing to pay more than the competitive wage.
B) workers should be willing to give the firm collateral that the firm would keep if the firm ever caught the worker shirking, and in exchange the worker would be willing to work for a wage less than the efficiency wage.
C) firms cannot issue bonds to pay for labor costs.
D) workers do not know how well the firm can monitor worker effort.
E) worker effort is unrelated to wages.
Correct Answer:
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A) firms to
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Q25: Suppose a firm overpays its workers at
Q26: One piece of evidence in favor of
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