Question : 21) Suppose the full-employment equilibrium real wage rate $11 per : 1238528

21) Suppose the full-employment equilibrium real wage rate is $11 per hour while the actual real wage rate is $12 per hour. If the actual real wage rate does not change, then

A) job rationing will occur.

B) job search will decline.

C) a positive Okun Gap will occur.

D) the production function will shift downward.

E) job rationing will decrease.

22) Efficiency wages, above equilibrium minimum wage rates, and higher union wages are likely to

A) increase the natural unemployment rate.

B) increase cyclical unemployment.

C) reduce the equilibrium real wage rate.

D) increase the equilibrium real wage rate.

E) decrease the natural unemployment rate.

23) The presence of efficiency, minimum and union wages

A) can explain job rationing because they lower the natural unemployment rate.

B) can explain job rationing because they raise the real wage rate above equilibrium.

C) can explain job rationing because they lower the real wage rate below equilibrium.

D) does not affect job rationing because they affect only the amount of job search.

E) cannot explain job rationing because they are a natural part of the economy.

24) Efficiency wages are

A) mandated by law.

B) set below the equilibrium level of the real wage.

C) offered by firms who want to reduce turnover in the labor force.

D) special wages offered to teenagers.

E) the result of demographic change.

25) An efficiency wage

A) is set above the equilibrium real wage rate to induce greater work effort.

B) is set below the equilibrium real wage rate to reduce labor costs.

C) increases the supply of labor and therefore increases potential GDP.

D) increases the demand for labor and therefore increases potential GDP.

E) reduces frictional unemployment.

26) An efficiency wage is designed to

A) induce more work effort.

B) keep the minimum wage from rising.

C) keep the minimum wage from falling.

D) to induce more employment.

E) decrease the need for workers to search for jobs.

27) An efficiency wage is designed to ________ work effort and to ________ labor turnover.

A) decrease; lower

B) decrease; raise

C) increase; raise

D) increase; lower

E) not change; decrease

28) An efficiency wage is ________ because the result is ________.

A) set above the equilibrium real wage; reduced turnover and less work effort

B) set above the equilibrium real wage; increased turnover and more work effort

C) set below the equilibrium real wage; reduced turnover and more work effort

D) set above the equilibrium real wage; reduced turnover and more work effort

E) not often used; not much different from minimum wage use

29) An efficiency wage ________ because ________.

A) decreases job rationing; the real wage rate is lowered below the equilibrium

B) increases job rationing; the real wage rate is lowered below the equilibrium

C) decreases job rationing; the real wage rate is raised above the equilibrium

D) increases job rationing; the real wage rate is raised above the equilibrium

E) is used often; it is inexpensive and effective

30) Efficiency wages are

A) the legal minimum wage a firm can pay a worker.

B) a possible cause of job rationing because they drive wages below their equilibrium level.

C) a possible cause of job rationing because they drive wages above their equilibrium level.

D) a possible cause of job rationing because they force wages to equal their equilibrium level.

E) another name for the equilibrium wage.