‘Wage compression’ occurs when variability in wages is lower than variability in workers’ performance or output....

‘Wage compression’ occurs when variability in wages is lower than variability in workers’ performance or output. Why is this phenomenon a puzzle for standard economic theory? Why do (some) organisations compress wages?

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Rahul Sunny answered 2 years ago

Is it fair to workers of developed countries when companies shift work to lower wage countries?...

Is it fair to workers of developed countries when companies shift work to lower wage countries? Explain.

Employers and workers can increase output and employment by agreeing to lower nominal wages. Reasons they do not do so include:

Employers and workers can increase output and employment by agreeing to lower nominal wages. Reasons they do not do so include:Select one:a. they are operating under inflexible long-term contractsb. negotiating additional short-term contracts is expensive and time consumingc. the incentive to accept a lower wage is reduced by the prospect of receiving unemployment benefitsd. all of the above

If the government imposes a minimum wage that increases wages for workers employed by the firms...

If the government imposes a minimum wage that increases wages for workers employed by the firms participating in the market, what happens to the inverse supply function? what happens to the equilibrium price of products traded in this market?

True or False: Explain your answer If wages in nation 1 are lower than wages in...

True or False: Explain your answer If wages in nation 1 are lower than wages in nation 2, but labor productivity is much higher in nation 2, labor costs are not necessarily higher in nation 2.

How are wages set in the labor market? Are workers and companies Wage (price) setters or...

How are wages set in the labor market? Are workers and companies Wage (price) setters or wage (price) takers or both? Explain how a company or a worker can be a wage setter, while other companies and workers are wage takers. Hint: A wage setter is where the company/worker decide how much to pay/how much the wages should be and wage taker is where the company pays what the market wages are, no more or less.

1. The wage paid to workers is __ than marginal revenue product and _ than marginal...

1. The wage paid to workers is ________ than marginal revenue product and _______ than marginal resource cost for a monopsonist in equilibrium. less; less less; greater greater; less greater; greater 2. Farmer A and B share a farm and are equally good at their job; however, Farmer B does not like to wake up early, the long hours, or working in bad weather. Fortunately, Farmer A does not mind these drawbacks. The $50,000 annual salary is just enough to...

TRUE OR FALSE a) If output is less than potential output, unemployment will encourage workers to...

TRUE OR FALSE a) If output is less than potential output, unemployment will encourage workers to accept smaller raises, which brings inflation below expected inflation. Eventually, expected inflation will fall, which allows firms to lower the inflation rate. As the real money supply rises, investment and output rise. The process continues until the economy is in medium-run equilibrium. b) It is easier to stabilize the economy if expectations remain anchored. c)It is easier for central banks to stabilize the economy...

An industry hires 30 workers when the wage is $20. It raises the number of workers...

An industry hires 30 workers when the wage is $20. It raises the number of workers hired to 56 when the wages fall to $10. What is the short-run elasticity of labor demand? Is the demand elastic or inelastic?

1.If an economist observes that the average wage rate in Portugal is lower than is the...

1.If an economist observes that the average wage rate in Portugal is lower than is the average wage rate in Switzerland, the economist explains that the most likely cause of this difference in average wage rates is that A. worker productivity in Portugal is higher than it is in Switzerland b.worker productivity in Portugal is lower than it is in Switzerland c. Switzerland likely has much stronger labor unions than does Portugal d.Swiss workers are better protected than are Portuguese...

A standard efficiency wage model pays workers higher wages in order to increase worker efficiency. As...

A standard efficiency wage model pays workers higher wages in order to increase worker efficiency. As a result, firm profits increase and there is a pool of involuntarily unemployed workers. In this model, if the firm's cost of monitoring effort falls, A. the firm will increase its number of factory managers. B. the number of shirking workers will fall. C. the efficiency wage will fall. D. firm profits will fall. E. the pool of involuntarily unemployed workers will increase.

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