Question : 51) The theory of “efficiency wages” provides A) a way in : 1384494

51) The theory of “efficiency wages” provides

A) a way in which firms can pay workers less than the market-clearing wage.

B) an explanation for the high wages that unions are able to extract from firms.

C) many firms with a good reason to dismiss workers.

D) most workers with a good reason to quit.

E) one explanation for why wages do not readily fall in response to excess supply in labour markets.

52) The theory of “efficiency wages” suggests that a pool of involuntarily unemployed workers

A) quickly disappears because perfectly-flexible wages eliminates this inefficient waste of resources.

B) exists only between sessions of wage re-negotiation.

C) is comprised solely of workers who have failed to meet the productivity standards of potential employers.

D) is irrelevant to the behaviour of employed workers.

E) provides an incentive for employees to work hard so they are not laid off.

53) A likely consequence of firms paying “efficiency wages” is

A) decreased unemployment.

B) increased unemployment.

C) lower real wages for employed workers.

D) more competitive labour markets.

E) rapid wage adjustment in the face of labour-market changes.

54) Which statement by an employer is consistent with the efficiency wage theory?

A) “I pay more than the going rate so that my employees work hard.”

B) “I pay only enough to attract workers who are at the bottom of the pay scale.”

C) “I love it when unemployment goes up because that drives down my wage costs.”

D) “Workers can always find jobs, if only they lower their expectations.”

E) “Unions have only their current members’ interests at heart.”

55) In macroeconomic theories of national-income determination, short-run changes in real GDP are typically associated with changes in ________ unemployment.

A) frictional

B) structural

C) cyclical

D) voluntary

E) efficiency-wage

56) When the total number of unfilled job openings in the economy is equal to the total number of persons unemployed, ________ is zero.

A) cyclical unemployment

B) frictional unemployment

C) involuntary unemployment

D) the NAIRU

E) structural unemployment

57) The concept of “full employment” refers to a situation in which there exists

A) an unemployment rate of less than 5%.

B) no job vacancies at the time.

C) only structural and/or frictional unemployment.

D) only involuntary unemployment.

E) a measured unemployment rate of zero.

58) The kind of unemployment that results when actual real GDP is less than potential GDP is known as ________ unemployment.

A) cyclical

B) frictional

C) natural

D) structural

E) voluntary

59) The best description of the cause of “cyclical” unemployment is that

A) firms engage in race, gender and sex discrimination in their hiring practices.

B) some individuals do not have marketable skills for the jobs that do exist.

C) the AD curve shifts to the right.

D) the level of overall economic activity falls below its potential level.

E) workers often voluntarily quit a job to look for a better job.

60) Which of the following statements about frictional unemployment is most accurate?

A) The only way to reduce it is to shift the AD curve to the left.

B) The only way to reduce it is to shift the AD curve to the right.

C) Its source is that unemployed workers and the employers with job vacancies have not yet found each other.

D) It exists when only there are no jobs for the unemployed people in the economy.

E) Its source is a mismatch between the needs of employers with job vacancies and the unemployed workers.