Question 1

If there were no factors keeping wages from reaching equilibrium then there would be no

Accepted Answer

The answer of If there were no factors keeping wages...

Question 2

Job search

Accepted Answer

The answer of Job search
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Question 3

According to the theory of efficiency wages, if a firm stops paying efficiency wages it is likely to see a(n)

Accepted Answer

According to the theory of efficiency wages, firms that pay above-market wages do so to increase worker productivity and reduce turnover. If a firm stops paying efficiency wages, it is likely that workers will leave for higher paying jobs, resulting in a decrease in how long workers stay on the job. Additionally, if the wages offered by the firm are now below market rates, there will likely be a decrease in the number of job applicants.

Question 4

Which of the following causes of unemployment is not associated with a wage rate above the market equilibrium level?

Accepted Answer

Job search is not associated with a wage rate above the market equilibrium level. Job search refers to the process of workers searching for suitable job openings and may lead to unemployment due to the time it takes to find a new job, mismatch of skills, or other factors. It is not directly related to the wage rate being above the market equilibrium level. The other options, efficiency wages, minimum-wage laws, and unions, can all lead to a wage rate above the market equilibrium level and contribute to unemployment.

Question 5

Efficiency wages, minimum-wage laws, and unions all keep wages

Accepted Answer

The answer of Efficiency wages, minimum-wage laws, and unions all...

Question 6

Which famous company executive introduced an innovative pay system that is consistent with the theory of efficiency wages?

Accepted Answer

Henry Ford introduced an innovative pay system in the early 1900s that was consistent with the theory of efficiency wages. He paid his workers $5 a day, which was significantly higher than the prevailing wage at the time, in order to reduce turnover and increase productivity. This was based on the idea that higher pay would attract and retain better workers and increase their motivation and effort on the job, ultimately increasing productivity and profits for the company.

Question 7

Which of the following causes of unemployment is associated with a wage rate above the market equilibrium level?

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The answer of Which of the following causes of unemployment...

Question 8

The amount of unemployment varies little over time and across countries.

Accepted Answer

The amount of unemployment can vary greatly over time and across countries due to factors such as economic conditions, government policies, and population demographics.

Question 9

Unions

Accepted Answer

The answer of Unions
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Question 10

Minimum-wage laws

Accepted Answer

The answer of Minimum-wage laws
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Question 11

Sectoral changes in demand

Accepted Answer

The answer of Sectoral changes in demand
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Question 12

Minimum-wage laws, unions, and efficiency wages contribute to

Accepted Answer

Minimum-wage laws, unions, and efficiency wages can lead to structural unemployment as they can create a mismatch between the skills and wages of workers and the needs of employers. For example, if minimum-wage laws require employers to pay wages that exceed a worker's productivity, employers may choose to hire fewer workers or invest in automation technology, leading to a decrease in employment. These factors can also contribute to the natural rate of unemployment, which is the level of unemployment that persists even when the economy is at full employment.

Question 13

When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle.

Accepted Answer

When a country's workers are fully employed, they are producing goods and services, which contributes to the gross domestic product (GDP) of the country. If many workers are idle, there is a decrease in the production and ultimately a decrease in GDP. Therefore, keeping workers fully employed leads to a higher level of GDP.

Question 14

In the early 1900s, Henry Ford introduced a

Accepted Answer

Henry Ford introduced a high-wage policy, paying his workers $5 per day which was double the prevailing wage at the time. This policy produced many of the effects predicted by efficiency-wage theory, such as lower labor turnover, increased productivity and quality of work, and reduced shirking and absenteeism.

Question 15

The amount of unemployment that a country typically experiences is a determinant of its standard of living.

Accepted Answer

High levels of unemployment can lead to lower levels of income, reduced consumption, and increased poverty, all of which can negatively impact a country's standard of living. When people are unemployed, they are unable to contribute to the economy, which can result in slower economic growth and overall lower levels of prosperity. Therefore, lower levels of unemployment are generally associated with a higher standard of living.

Question 16

Minimum-wage laws and unions are similar to each other but different from efficiency wages in that minimum-wage law and unions

Accepted Answer

The answer of Minimum-wage laws and unions are similar to...

Question 17

The natural rate of unemployment refers to the current unemployment rate.

Accepted Answer

The natural rate of unemployment refers to the rate of unemployment that occurs as part of the normal workings of the economy, even when the economy is considered to be healthy and growing. It is often estimated to be around 4-5%, while the current unemployment rate can be higher or lower than this natural rate depending on economic conditions.

Question 18

Some degree of unemployment is inevitable in a complex economy.

Accepted Answer

Even in a strong economy, there will always be some level of unemployment due to factors such as structural changes in industries, technological advancements, and individual job transitions.

Question 19

Which of the following is not a reason economies experience structural unemployment?

Accepted Answer

The answer of Which of the following is not a...

Question 20

Most people rely primarily on income other than their labor earnings to maintain their standard of living.

Accepted Answer

Most people rely primarily on their labor earnings (wages and salaries from employment) to maintain their standard of living, rather than income from other sources such as investments, pensions, or government benefits.

Quiz 28: Unemployment